Is MIDD Stock A Buy or Sell?

Is The Middleby Corporation (NASDAQ:MIDD) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Is MIDD stock a buy? The Middleby Corporation (NASDAQ:MIDD) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 30 hedge funds’ portfolios at the end of December. Our calculations also showed that MIDD isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as TG Therapeutics Inc (NASDAQ:TGTX), Lumentum Holdings Inc (NASDAQ:LITE), and Vornado Realty Trust (NYSE:VNO) to gather more data points.

In today’s marketplace there are dozens of gauges investors put to use to grade stocks. A pair of the less known gauges are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the elite investment managers can trounce the market by a healthy margin (see the details here).

John Rogers of Ariel Investments

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this psychedelic-drug startup. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we’re going to take a gander at the key hedge fund action regarding The Middleby Corporation (NASDAQ:MIDD).

Do Hedge Funds Think MIDD Is A Good Stock To Buy Now?

At the end of the fourth quarter, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 35 hedge funds with a bullish position in MIDD a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Arrowstreet Capital held the most valuable stake in The Middleby Corporation (NASDAQ:MIDD), which was worth $94.4 million at the end of the fourth quarter. On the second spot was Bares Capital Management which amassed $41.4 million worth of shares. Millennium Management, D E Shaw, and Ariel Investments were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Mountaineer Partners Management allocated the biggest weight to The Middleby Corporation (NASDAQ:MIDD), around 6.01% of its 13F portfolio. Jade Capital Advisors is also relatively very bullish on the stock, setting aside 3.81 percent of its 13F equity portfolio to MIDD.

Since The Middleby Corporation (NASDAQ:MIDD) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of fund managers who were dropping their full holdings by the end of the fourth quarter. It’s worth mentioning that Gregg Moskowitz’s Interval Partners said goodbye to the largest stake of all the hedgies watched by Insider Monkey, worth about $4.3 million in stock. Michael Gelband’s fund, ExodusPoint Capital, also dropped its stock, about $0.7 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to The Middleby Corporation (NASDAQ:MIDD). We will take a look at TG Therapeutics Inc (NASDAQ:TGTX), Lumentum Holdings Inc (NASDAQ:LITE), Vornado Realty Trust (NYSE:VNO), Ares Capital Corporation (NASDAQ:ARCC), Zions Bancorporation, National Association (NASDAQ:ZION), Robert Half International Inc. (NYSE:RHI), and National Retail Properties, Inc. (NYSE:NNN). This group of stocks’ market values are similar to MIDD’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.3 hedge funds with bullish positions and the average amount invested in these stocks was $407 million. That figure was $313 million in MIDD’s case. Lumentum Holdings Inc (NASDAQ:LITE) is the most popular stock in this table. On the other hand National Retail Properties, Inc. (NYSE:NNN) is the least popular one with only 14 bullish hedge fund positions. The Middleby Corporation (NASDAQ:MIDD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MIDD is 62.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Hedge funds were also right about betting on MIDD as the stock returned 27.9% since the end of Q4 (through 4/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Disclosure: None. This article was originally published at Insider Monkey.