The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Mistras Group Inc (NYSE:MG) from the perspective of those successful funds.
Is Mistras Group Inc (NYSE:MG) an exceptional investment right now? The smart money is definitely taking an optimistic view. The number of long hedge fund bets rose by 1 lately. MG was in 13 hedge funds’ portfolios at the end of September. There were 12 hedge funds in our database with MG holdings at the end of the previous quarter. At the end of this article we will also compare MG to other stocks including CommerceHub Inc (NASDAQ:CHUBK), TrustCo Bank Corp NY (NASDAQ:TRST), and Flushing Financial Corporation (NASDAQ:FFIC) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Now, let’s take a peek at the latest action regarding Mistras Group Inc (NYSE:MG).
How are hedge funds trading Mistras Group Inc (NYSE:MG)?
At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, up 8% from the previous quarter. The graph below displays the number of hedge funds with bullish position in MG over the last 5 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Peter Schliemann’s Rutabaga Capital Management has the biggest position in Mistras Group Inc (NYSE:MG), worth close to $15.4 million, accounting for 3.1% of its total 13F portfolio. Coming in second is D. E. Shaw’s D E Shaw, one of the biggest hedge funds in the world; holding an $8.4 million position. Some other professional money managers that are bullish include Jim Simons’ Renaissance Technologies, Cliff Asness’ AQR Capital Management and Israel Englander’s Millennium Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As aggregate interest increased, specific money managers have jumped into Mistras Group Inc (NYSE:MG) headfirst. Glenn Russell Dubin’s Highbridge Capital Management initiated the biggest position in Mistras Group, Inc. (NYSE:MG). According to its latest 13F filing, the fund had $0.2 million invested in the company at the end of the quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Mistras Group Inc (NYSE:MG) but similarly valued. These stocks are CommerceHub Inc (NASDAQ:CHUBK), TrustCo Bank Corp NY (NASDAQ:TRST), Flushing Financial Corporation (NASDAQ:FFIC), and Civitas Solutions Inc (NYSE:CIVI). This group of stocks’ market valuations match MG’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CHUBK | 22 | 139171 | 22 |
| TRST | 11 | 75047 | 0 |
| FFIC | 10 | 42509 | 3 |
| CIVI | 8 | 9503 | 1 |
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $45 million in MG’s case. CommerceHub Inc (NASDAQ:CHUBK) is the most popular stock in this table. On the other hand Civitas Solutions Inc (NYSE:CIVI) is the least popular one with only 8 bullish hedge fund positions. Mistras Group Inc (NYSE:MG) 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. In this regard CHUBK might be a better candidate to consider taking a long position in.
Disclosure: None
