Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4 years and analyze what the smart money thinks of American Outdoor Brands Corporation (NASDAQ:AOBC) based on that data.
Is American Outdoor Brands Corporation (NASDAQ:AOBC) an excellent stock to buy now? The best stock pickers are in an optimistic mood. The number of long hedge fund positions inched up by 1 recently. Our calculations also showed that AOBC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Sander Gerber of Hudson Bay Capital Management
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a look at the recent hedge fund action encompassing American Outdoor Brands Corporation (NASDAQ:AOBC).
What have hedge funds been doing with American Outdoor Brands Corporation (NASDAQ:AOBC)?
Heading into the fourth quarter of 2019, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards AOBC over the last 17 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
The largest stake in American Outdoor Brands Corporation (NASDAQ:AOBC) was held by Renaissance Technologies, which reported holding $20.7 million worth of stock at the end of September. It was followed by Greenhouse Funds with a $6.3 million position. Other investors bullish on the company included Arrowstreet Capital, D E Shaw, and Hudson Bay Capital Management. In terms of the portfolio weights assigned to each position Alden Global Capital allocated the biggest weight to American Outdoor Brands Corporation (NASDAQ:AOBC), around 3.71% of its 13F portfolio. Greenhouse Funds is also relatively very bullish on the stock, setting aside 1.29 percent of its 13F equity portfolio to AOBC.
With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Alden Global Capital, managed by Randall Smith, assembled the most outsized position in American Outdoor Brands Corporation (NASDAQ:AOBC). Alden Global Capital had $2 million invested in the company at the end of the quarter. Mark Broach’s Manatuck Hill Partners also made a $0.9 million investment in the stock during the quarter. The other funds with new positions in the stock are David Harding’s Winton Capital Management and Steve Cohen’s Point72 Asset Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as American Outdoor Brands Corporation (NASDAQ:AOBC) but similarly valued. We will take a look at Fluidigm Corporation (NASDAQ:FLDM), Summit Financial Group, Inc. (NASDAQ:SMMF), CASI Pharmaceuticals Inc (NASDAQ:CASI), and resTORbio, Inc. (NASDAQ:TORC). This group of stocks’ market caps are similar to AOBC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FLDM | 20 | 89529 | 3 |
| SMMF | 2 | 7717 | 0 |
| CASI | 2 | 282 | 1 |
| TORC | 4 | 53231 | 1 |
| Average | 7 | 37690 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $38 million. That figure was $51 million in AOBC’s case. Fluidigm Corporation (NASDAQ:FLDM) is the most popular stock in this table. On the other hand Summit Financial Group, Inc. (NASDAQ:SMMF) is the least popular one with only 2 bullish hedge fund positions. American Outdoor Brands Corporation (NASDAQ:AOBC) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on AOBC as the stock returned 49.4% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
