Macquarie Infrastructure Corporation (MIC): Hedge Fund Interest Fizzled Out

We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Macquarie Infrastructure Corporation (NYSE:MIC) based on that data.

Macquarie Infrastructure Corporation (NYSE:MIC) was in 30 hedge funds’ portfolios at the end of March. MIC shareholders have witnessed a decrease in activity from the world’s largest hedge funds lately. There were 34 hedge funds in our database with MIC positions at the end of the previous quarter. Our calculations also showed that MIC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Mario Gabelli of GAMCO Investors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a look at the latest hedge fund action regarding Macquarie Infrastructure Corporation (NYSE:MIC).

Hedge fund activity in Macquarie Infrastructure Corporation (NYSE:MIC)

At Q1’s end, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -12% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MIC over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Eminence Capital held the most valuable stake in Macquarie Infrastructure Corporation (NYSE:MIC), which was worth $67.1 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $33.4 million worth of shares. Rubric Capital Management, GAMCO Investors, and Cove Street Capital 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 Litespeed Management allocated the biggest weight to Macquarie Infrastructure Corporation (NYSE:MIC), around 14.81% of its 13F portfolio. Rubric Capital Management is also relatively very bullish on the stock, dishing out 4.91 percent of its 13F equity portfolio to MIC.

Judging by the fact that Macquarie Infrastructure Corporation (NYSE:MIC) has witnessed falling interest from hedge fund managers, it’s easy to see that there lies a certain “tier” of hedgies that slashed their positions entirely heading into Q4. It’s worth mentioning that David Brown’s Hawk Ridge Management dumped the largest investment of the 750 funds tracked by Insider Monkey, valued at close to $15.7 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund cut about $6.2 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 4 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks similar to Macquarie Infrastructure Corporation (NYSE:MIC). We will take a look at LivaNova PLC (NASDAQ:LIVN), GATX Corporation (NYSE:GATX), Franklin Electric Co. (NASDAQ:FELE), and Sprouts Farmers Market Inc (NASDAQ:SFM). This group of stocks’ market caps are similar to MIC’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.75 hedge funds with bullish positions and the average amount invested in these stocks was $223 million. That figure was $252 million in MIC’s case. Sprouts Farmers Market Inc (NASDAQ:SFM) is the most popular stock in this table. On the other hand GATX Corporation (NYSE:GATX) is the least popular one with only 13 bullish hedge fund positions. Macquarie Infrastructure Corporation (NYSE:MIC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. Unfortunately MIC wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on MIC were disappointed as the stock returned 12.4% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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