Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of MP Materials Corp. (NYSE:MP) based on that data.
Is MP Materials Corp. (NYSE:MP) going to take off soon? Prominent investors were in an optimistic mood. MP Materials Corp. (NYSE:MP) was in 32 hedge funds’ portfolios at the end of December. Our calculations also showed that MP isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In the eyes of most traders, hedge funds are perceived as slow, old investment tools of yesteryear. While there are greater than 8000 funds trading today, Our researchers choose to focus on the aristocrats of this club, approximately 850 funds. These money managers orchestrate the lion’s share of the smart money’s total asset base, and by keeping track of their top investments, Insider Monkey has deciphered several investment strategies that have historically outrun the market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
Daniel Gold of QVT Financial
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Do Hedge Funds Think MP Is A Good Stock To Buy Now?
At fourth quarter’s end, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 32 from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards MP over the last 22 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in MP Materials Corp. (NYSE:MP) was held by JHL Capital Group, which reported holding $1529.3 million worth of stock at the end of December. It was followed by QVT Financial with a $734.2 million position. Other investors bullish on the company included Slate Path Capital, Omega Advisors, and Moore Global Investments. In terms of the portfolio weights assigned to each position JHL Capital Group allocated the biggest weight to MP Materials Corp. (NYSE:MP), around 100% of its 13F portfolio. QVT Financial is also relatively very bullish on the stock, setting aside 40.65 percent of its 13F equity portfolio to MP.
Consequently, key money managers have jumped into MP Materials Corp. (NYSE:MP) headfirst. JHL Capital Group, managed by James H. Litinsky, assembled the most valuable position in MP Materials Corp. (NYSE:MP). JHL Capital Group had $1.5293 billion invested in the company at the end of the quarter. Daniel Gold’s QVT Financial also initiated a $734.2 million position during the quarter. The other funds with brand new MP positions are David Greenspan’s Slate Path Capital, Leon Cooperman’s Omega Advisors, and Louis Bacon’s Moore Global Investments.
Let’s check out hedge fund activity in other stocks similar to MP Materials Corp. (NYSE:MP). We will take a look at Toll Brothers Inc (NYSE:TOL), FireEye Inc (NASDAQ:FEYE), Tenable Holdings, Inc. (NASDAQ:TENB), Envista Holdings Corporation (NYSE:NVST), Enel Chile S.A. (NYSE:ENIC), Coty Inc (NYSE:COTY), and TriNet Group Inc (NYSE:TNET). All of these stocks’ market caps are closest to MP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TOL | 34 | 579654 | -5 |
| FEYE | 31 | 314317 | 3 |
| TENB | 39 | 901500 | 9 |
| NVST | 33 | 801088 | 13 |
| ENIC | 7 | 22302 | 3 |
| COTY | 22 | 316463 | -4 |
| TNET | 21 | 438322 | -5 |
| Average | 26.7 | 481949 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.7 hedge funds with bullish positions and the average amount invested in these stocks was $482 million. That figure was $2745 million in MP’s case. Tenable Holdings, Inc. (NASDAQ:TENB) is the most popular stock in this table. On the other hand Enel Chile S.A. (NYSE:ENIC) is the least popular one with only 7 bullish hedge fund positions. MP Materials Corp. (NYSE:MP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MP is 72.5. 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 MP, though not to the same extent, as the stock returned 9.3% since Q4 (through April 12th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
