Were Hedge Funds Right About MasterCraft Boat Holdings, Inc. (MCFT)?
Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT).
Hedge fund interest in MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that MCFT isn't among the 30 most popular stocks among hedge funds (click for Q1 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 IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP), AerSale Corporation (NASDAQ:ASLE), and Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) to gather more data points.
Today there are dozens of signals stock market investors use to appraise publicly traded companies. A pair of the best signals are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the best investment managers can trounce the S&P 500 by a superb margin (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
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Do Hedge Funds Think MCFT Is A Good Stock To Buy Now?
At Q1's end, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MCFT over the last 23 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) was held by Fairfax Financial Holdings, which reported holding $44.8 million worth of stock at the end of December. It was followed by Royce & Associates with a $36.1 million position. Other investors bullish on the company included Divisar Capital, Verdad Advisers, and ACK Asset Management. In terms of the portfolio weights assigned to each position Divisar Capital allocated the biggest weight to MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT), around 7.8% of its 13F portfolio. Verdad Advisers is also relatively very bullish on the stock, designating 2.97 percent of its 13F equity portfolio to MCFT.
Seeing as MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) has faced a decline in interest from hedge fund managers, we can see that there exists a select few hedgies who were dropping their full holdings in the first quarter. It's worth mentioning that Jack Ripsteen's Potrero Capital Research said goodbye to the biggest stake of the "upper crust" of funds watched by Insider Monkey, totaling about $4.2 million in stock. Noam Gottesman's fund, GLG Partners, also cut its stock, about $2.5 million worth. These transactions are important to note, 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 - not necessarily in the same industry as MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) but similarly valued. We will take a look at IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP), AerSale Corporation (NASDAQ:ASLE), Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX), Geron Corporation (NASDAQ:GERN), Tredegar Corporation (NYSE:TG), Allied Motion Technologies, Inc. (NASDAQ:AMOT), and Willdan Group, Inc. (NASDAQ:WLDN). This group of stocks' market values are closest to MCFT's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IRCP,4,13166,0 ASLE,15,360368,5 CRNX,11,199155,-3 GERN,9,60987,-7 TG,9,52491,0 AMOT,8,45413,-1 WLDN,7,23706,5 Average,9,107898,-0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $108 million. That figure was $142 million in MCFT's case. AerSale Corporation (NASDAQ:ASLE) is the most popular stock in this table. On the other hand IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) is more popular among hedge funds. Our overall hedge fund sentiment score for MCFT is 76.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.5% in 2021 through July 23rd and still beat the market by 10.1 percentage points. Unfortunately MCFT wasn't nearly as popular as these 5 stocks and hedge funds that were betting on MCFT were disappointed as the stock returned -0.2% since the end of the first quarter (through 7/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
