Will the new coronavirus cause a recession in US in the next 6 months? On February 27th, we put the probability at 75% and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards AMN Healthcare Services Inc (NYSE:AMN).
AMN Healthcare Services Inc (NYSE:AMN) has seen an increase in activity from the world’s largest hedge funds lately. Our calculations also showed that AMN isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
According to most stock holders, hedge funds are perceived as underperforming, old financial vehicles of years past. While there are more than 8000 funds in operation today, Our researchers hone in on the upper echelon of this club, about 850 funds. It is estimated that this group of investors preside over the majority of the hedge fund industry’s total capital, and by observing their inimitable stock picks, Insider Monkey has brought to light various investment strategies that have historically outstripped the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 35.3% since February 2017 (through March 3rd) even though the market was up more than 35% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
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We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a look at the new hedge fund action regarding AMN Healthcare Services Inc (NYSE:AMN).
What does smart money think about AMN Healthcare Services Inc (NYSE:AMN)?
At the end of the fourth quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards AMN over the last 18 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 AMN Healthcare Services Inc (NYSE:AMN) was held by Millennium Management, which reported holding $15.9 million worth of stock at the end of September. It was followed by GLG Partners with a $14.5 million position. Other investors bullish on the company included Royce & Associates, Driehaus Capital, and AQR Capital Management. In terms of the portfolio weights assigned to each position Algert Coldiron Investors allocated the biggest weight to AMN Healthcare Services Inc (NYSE:AMN), around 0.34% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, designating 0.1 percent of its 13F equity portfolio to AMN.
As aggregate interest increased, specific money managers were breaking ground themselves. Driehaus Capital, managed by Richard Driehaus, established the most valuable position in AMN Healthcare Services Inc (NYSE:AMN). Driehaus Capital had $3.4 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also made a $1.1 million investment in the stock during the quarter. The other funds with brand new AMN positions are Donald Sussman’s Paloma Partners, Mika Toikka’s AlphaCrest Capital Management, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as AMN Healthcare Services Inc (NYSE:AMN) but similarly valued. These stocks are PotlatchDeltic Corporation (NASDAQ:PCH), Power Integrations Inc (NASDAQ:POWI), GATX Corporation (NYSE:GATX), and Triton International Limited (NYSE:TRTN). This group of stocks’ market valuations match AMN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PCH | 16 | 345548 | -4 |
| POWI | 17 | 62740 | 4 |
| GATX | 21 | 227877 | 5 |
| TRTN | 16 | 56386 | 1 |
| Average | 17.5 | 173138 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $173 million. That figure was $52 million in AMN’s case. GATX Corporation (NYSE:GATX) is the most popular stock in this table. On the other hand PotlatchDeltic Corporation (NASDAQ:PCH) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks AMN Healthcare Services Inc (NYSE:AMN) is even less popular than PCH. Hedge funds clearly dropped the ball on AMN as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 10.1 percentage points. These stocks lost 13.0% in 2020 through April 6th but still beat the market by 4.2 percentage points. A small number of hedge funds were also right about betting on AMN as the stock returned -3.5% during the same time period and outperformed the market by an even larger margin.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
