Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards MMA Capital Holdings Inc. (NASDAQ:MMAC) to find out whether there were any major changes in hedge funds’ views.
MMA Capital Holdings Inc. (NASDAQ:MMAC) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 3 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that MMAC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). 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 Select Bancorp, Inc. (NASDAQ:SLCT), AcelRx Pharmaceuticals Inc (NASDAQ:ACRX), and Platinum Group Metals Limited (NYSE:PLG) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most stock holders, hedge funds are viewed as slow, outdated financial tools of years past. While there are more than 8000 funds in operation today, Our researchers hone in on the elite of this club, about 850 funds. These money managers command the lion’s share of all hedge funds’ total capital, and by keeping track of their finest equity investments, Insider Monkey has formulated a number of investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points annually 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 6 short targets in our latest quarterly update .
Peter Rathjens of Arrowstreet Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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. Keeping this in mind let’s take a look at the latest hedge fund action surrounding MMA Capital Holdings Inc. (NASDAQ:MMAC).
How are hedge funds trading MMA Capital Holdings Inc. (NASDAQ:MMAC)?
At Q3’s end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in MMAC over the last 21 quarters. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
Among these funds, Almitas Capital held the most valuable stake in MMA Capital Holdings Inc. (NASDAQ:MMAC), which was worth $3 million at the end of the third quarter. On the second spot was Madison Avenue Partners which amassed $0.6 million worth of shares. Arrowstreet Capital was 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 Almitas Capital allocated the biggest weight to MMA Capital Holdings Inc. (NASDAQ:MMAC), around 4.11% of its 13F portfolio. Madison Avenue Partners is also relatively very bullish on the stock, setting aside 0.22 percent of its 13F equity portfolio to MMAC.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s now review hedge fund activity in other stocks similar to MMA Capital Holdings Inc. (NASDAQ:MMAC). We will take a look at Select Bancorp, Inc. (NASDAQ:SLCT), AcelRx Pharmaceuticals Inc (NASDAQ:ACRX), Platinum Group Metals Limited (NYSE:PLG), Codorus Valley Bancorp, Inc. (NASDAQ:CVLY), NACCO Industries, Inc. (NYSE:NC), Evogene Ltd. (NASDAQ:EVGN), and Battalion Oil Corporation (NYSE:BATL). All of these stocks’ market caps match MMAC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SLCT | 5 | 10900 | 0 |
| ACRX | 5 | 6850 | 2 |
| PLG | 3 | 3394 | -1 |
| CVLY | 4 | 14459 | 0 |
| NC | 4 | 6624 | -1 |
| EVGN | 2 | 2543 | 1 |
| BATL | 4 | 83866 | -1 |
| Average | 3.9 | 18377 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.9 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $4 million in MMAC’s case. Select Bancorp, Inc. (NASDAQ:SLCT) is the most popular stock in this table. On the other hand Evogene Ltd. (NASDAQ:EVGN) is the least popular one with only 2 bullish hedge fund positions. MMA Capital Holdings Inc. (NASDAQ:MMAC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MMAC is 51.7. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on MMAC as the stock returned 9.2% since the end of the third quarter (through 11/23) and outperformed the market by an even larger margin.
Follow Mma Capital Holdings Llc (NASDAQ:MMAC)
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Disclosure: None. This article was originally published at Insider Monkey.
