Is Maiden Holdings (MHLD) A Good Stock To Buy Now?
We at Insider Monkey have gone over 817 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 September 30th. In this article, we look at what those funds think of Maiden Holdings, Ltd. (NASDAQ:MHLD) based on that data.
Is Maiden Holdings (MHLD) a good stock to buy now? MHLD was in 6 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 20. MHLD has experienced a decrease in hedge fund interest recently. There were 7 hedge funds in our database with MHLD positions at the end of the second quarter. Our calculations also showed that MHLD 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David Siegel of Two Sigma Advisors
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 15 best blue chip stocks 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. With all of this in mind let's take a look at the key hedge fund action regarding Maiden Holdings, Ltd. (NASDAQ:MHLD).
What have hedge funds been doing with Maiden Holdings, Ltd. (NASDAQ:MHLD)?
At third quarter's end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the second quarter of 2020. By comparison, 10 hedge funds held shares or bullish call options in MHLD a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, 683 Capital Partners, managed by Ari Zweiman, holds the most valuable position in Maiden Holdings, Ltd. (NASDAQ:MHLD). 683 Capital Partners has a $9.6 million position in the stock, comprising 0.7% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, with a $1.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that are bullish include Israel Englander's Millennium Management, John Overdeck and David Siegel's Two Sigma Advisors and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position 683 Capital Partners allocated the biggest weight to Maiden Holdings, Ltd. (NASDAQ:MHLD), around 0.7% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.0011 percent of its 13F equity portfolio to MHLD.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: D E Shaw. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified MHLD as a viable investment and initiated a position in the stock.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Maiden Holdings, Ltd. (NASDAQ:MHLD) but similarly valued. We will take a look at Fang Holdings Limited (NYSE:SFUN), SB Financial Group, Inc. (NASDAQ:SBFG), First Western Financial, Inc. (NASDAQ:MYFW), PhaseBio Pharmaceuticals, Inc. (NASDAQ:PHAS), CB Financial Services, Inc. (NASDAQ:CBFV), Sharps Compliance Corp. (NASDAQ:SMED), and Mediwound Ltd (NASDAQ:MDWD). This group of stocks' market caps are closest to MHLD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SFUN,2,572,0 SBFG,2,8879,0 MYFW,3,4673,0 PHAS,5,6170,-2 CBFV,2,2196,0 SMED,5,11037,1 MDWD,2,2449,0 Average,3,5139,-0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $11 million in MHLD's case. PhaseBio Pharmaceuticals, Inc. (NASDAQ:PHAS) is the most popular stock in this table. On the other hand Fang Holdings Limited (NYSE:SFUN) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Maiden Holdings, Ltd. (NASDAQ:MHLD) is more popular among hedge funds. Our overall hedge fund sentiment score for MHLD is 63. 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 returned 30.7% in 2020 through November 27th but still managed to beat the market by 16.1 percentage points. Hedge funds were also right about betting on MHLD as the stock returned 83.6% since the end of September (through 11/27) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
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