At Insider Monkey, we pore over the filings of nearly 873 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of June 30th. In this article, we will use that wealth of knowledge to determine whether or not Medical Properties Trust, Inc. (NYSE:MPW) makes for a good investment right now.
Medical Properties Trust, Inc. (NYSE:MPW) investors should be aware of a decrease in activity from the world’s largest hedge funds of late. Medical Properties Trust, Inc. (NYSE:MPW) was in 19 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 23. Our calculations also showed that MPW isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
Keeping this in mind we’re going to go over the fresh hedge fund action surrounding Medical Properties Trust, Inc. (NYSE:MPW).
Do Hedge Funds Think MPW Is A Good Stock To Buy Now?
At Q2’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards MPW over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Medical Properties Trust, Inc. (NYSE:MPW) was held by Cardinal Capital, which reported holding $114.2 million worth of stock at the end of June. It was followed by Waterfront Capital Partners with a $56 million position. Other investors bullish on the company included D E Shaw, Citadel Investment Group, and GLG Partners. In terms of the portfolio weights assigned to each position Waterfront Capital Partners allocated the biggest weight to Medical Properties Trust, Inc. (NYSE:MPW), around 4.21% of its 13F portfolio. Cardinal Capital is also relatively very bullish on the stock, earmarking 2.73 percent of its 13F equity portfolio to MPW.
Since Medical Properties Trust, Inc. (NYSE:MPW) has experienced declining sentiment from the aggregate hedge fund industry, we can see that there were a few hedge funds that decided to sell off their full holdings in the second quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management said goodbye to the biggest stake of all the hedgies tracked by Insider Monkey, totaling an estimated $12 million in stock. Clint Carlson’s fund, Carlson Capital, also dumped its stock, about $6.9 million worth. These moves are important to note, as aggregate hedge fund interest fell by 4 funds in the second quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Medical Properties Trust, Inc. (NYSE:MPW). These stocks are Lamb Weston Holdings, Inc. (NYSE:LW), Chegg Inc (NYSE:CHGG), Trex Company, Inc. (NYSE:TREX), Grifols SA (NASDAQ:GRFS), The Toro Company (NYSE:TTC), Newell Brands Inc. (NASDAQ:NWL), and Molson Coors Beverage Company (NYSE:TAP). This group of stocks’ market caps resemble MPW’s market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LW,36,692976,-2 CHGG,38,667256,5 TREX,25,206431,2 GRFS,14,283634,2 TTC,32,976252,0 NWL,25,2028252,1 TAP,39,519321,5 Average,29.9,767732,1.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.9 hedge funds with bullish positions and the average amount invested in these stocks was $768 million. That figure was $267 million in MPW’s case. Molson Coors Beverage Company (NYSE:TAP) is the most popular stock in this table. On the other hand Grifols SA (NASDAQ:GRFS) is the least popular one with only 14 bullish hedge fund positions. Medical Properties Trust, Inc. (NYSE:MPW) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MPW is 35.8. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on MPW as the stock returned 4% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
Read More: Hedge Funds Are Selling Medical Properties Trust, Inc. (MPW)