Should I Buy Malibu Boats Inc (MBUU)?

·6 min read

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider Malibu Boats Inc (NASDAQ:MBUU) for your portfolio? We'll look to this invaluable collective wisdom for the answer.

Hedge fund interest in Malibu Boats Inc (NASDAQ:MBUU) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that MBUU 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 Cytokinetics, Inc. (NASDAQ:CYTK), Steelcase Inc. (NYSE:SCS), and Northwest Natural Holding Company (NYSE:NWN) to gather more data points.

In today’s marketplace there are plenty of gauges market participants use to analyze publicly traded companies. Two of the most innovative gauges are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the top money managers can outpace their index-focused peers by a healthy 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 .

Matthew Hulsizer PEAK6 Capital
Matthew Hulsizer PEAK6 Capital

Matthew Hulsizer of PEAK6 Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 homepage. Now let's take a gander at the key hedge fund action surrounding Malibu Boats Inc (NASDAQ:MBUU).

Do Hedge Funds Think MBUU Is A Good Stock To Buy Now?

At first quarter'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. By comparison, 16 hedge funds held shares or bullish call options in MBUU a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is MBUU A Good Stock To Buy?
Is MBUU A Good Stock To Buy?

According to Insider Monkey's hedge fund database, Renaissance Technologies has the most valuable position in Malibu Boats Inc (NASDAQ:MBUU), worth close to $58.7 million, corresponding to 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Richard Driehaus of Driehaus Capital, with a $24.8 million position; 0.4% of its 13F portfolio is allocated to the stock. Other peers that hold long positions contain Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Raffi Tokatlian's Ararat Capital and Chuck Royce's Royce & Associates. In terms of the portfolio weights assigned to each position Ararat Capital allocated the biggest weight to Malibu Boats Inc (NASDAQ:MBUU), around 6.04% of its 13F portfolio. Stormborn Capital Management is also relatively very bullish on the stock, designating 3.32 percent of its 13F equity portfolio to MBUU.

Judging by the fact that Malibu Boats Inc (NASDAQ:MBUU) has faced falling interest from the entirety of the hedge funds we track, we can see that there exists a select few hedge funds that slashed their full holdings last quarter. At the top of the heap, Doug Gordon, Jon Hilsabeck and Don Jabro's Shellback Capital cut the largest stake of the "upper crust" of funds tracked by Insider Monkey, totaling close to $3.6 million in stock. Noam Gottesman's fund, GLG Partners, also said goodbye to its stock, about $2.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let's also examine hedge fund activity in other stocks similar to Malibu Boats Inc (NASDAQ:MBUU). We will take a look at Cytokinetics, Inc. (NASDAQ:CYTK), Steelcase Inc. (NYSE:SCS), Northwest Natural Holding Company (NYSE:NWN), ICF International Inc (NASDAQ:ICFI), Aluminum Corp. of China Limited (NYSE:ACH), Stratasys, Ltd. (NASDAQ:SSYS), and Kronos Bio, Inc. (NASDAQ:KRON). All of these stocks' market caps are closest to MBUU's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CYTK,29,585164,3 SCS,19,127268,2 NWN,10,28380,0 ICFI,12,28041,-1 ACH,3,7519,-1 SSYS,24,481918,8 KRON,16,225983,-3 Average,16.1,212039,1.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.1 hedge funds with bullish positions and the average amount invested in these stocks was $212 million. That figure was $150 million in MBUU's case. Cytokinetics, Inc. (NASDAQ:CYTK) is the most popular stock in this table. On the other hand Aluminum Corp. of China Limited (NYSE:ACH) is the least popular one with only 3 bullish hedge fund positions. Malibu Boats Inc (NASDAQ:MBUU) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MBUU is 51.8. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 surpassed the market again by 10.1 percentage points. Unfortunately MBUU wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); MBUU investors were disappointed as the stock returned 0.1% since the end of March (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 in 2021.

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

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