With the second-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the third quarter of 2021. One of these stocks was AFC Gamma, Inc. (NASDAQ:AFCG).
AFC Gamma, Inc. (NASDAQ:AFCG) has experienced an increase in activity from the world’s largest hedge funds in recent months. AFC Gamma, Inc. (NASDAQ:AFCG) was in 10 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 5. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 5 hedge funds in our database with AFCG holdings at the end of March. Our calculations also showed that AFCG isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Sander Gerber of Hudson Bay Capital Management
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Do Hedge Funds Think AFCG Is A Good Stock To Buy Now?
At the end of June, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from one quarter earlier. On the other hand, there were a total of 0 hedge funds with a bullish position in AFCG a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Balyasny Asset Management, managed by Dmitry Balyasny, holds the most valuable position in AFC Gamma, Inc. (NASDAQ:AFCG). Balyasny Asset Management has a $4.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Rima Senvest Management, managed by Richard Mashaal, which holds a $3.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions comprise Paul Tudor Jones’s Tudor Investment Corp, Renaissance Technologies and Sander Gerber’s Hudson Bay Capital Management. In terms of the portfolio weights assigned to each position Intrepid Capital Management allocated the biggest weight to AFC Gamma, Inc. (NASDAQ:AFCG), around 0.6% of its 13F portfolio. Rima Senvest Management is also relatively very bullish on the stock, earmarking 0.11 percent of its 13F equity portfolio to AFCG.
With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Renaissance Technologies, initiated the largest position in AFC Gamma, Inc. (NASDAQ:AFCG). Renaissance Technologies had $1.3 million invested in the company at the end of the quarter. Sander Gerber’s Hudson Bay Capital Management also made a $1.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Mark Travis’s Intrepid Capital Management, Ken Griffin’s Citadel Investment Group, and Greg Eisner’s Engineers Gate Manager.
Let’s also examine hedge fund activity in other stocks similar to AFC Gamma, Inc. (NASDAQ:AFCG). We will take a look at Yellow Corporation (NASDAQ:YELL), Cheetah Mobile Inc (NYSE:CMCM), WAVE Life Sciences Ltd. (NASDAQ:WVE), Home Bancorp, Inc. (NASDAQ:HBCP), Carter Bank & Trust (NASDAQ:CARE), Investors Title Company (NASDAQ:ITIC), and Bit Digital, Inc. (NASDAQ:BTBT). This group of stocks’ market values are similar to AFCG’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| YELL | 14 | 29285 | -4 |
| CMCM | 4 | 1010 | 0 |
| WVE | 14 | 141994 | -6 |
| HBCP | 6 | 8557 | 4 |
| CARE | 13 | 17924 | 2 |
| ITIC | 5 | 43233 | 0 |
| BTBT | 7 | 8022 | 6 |
| Average | 9 | 35718 | 0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $17 million in AFCG’s case. Yellow Corporation (NASDAQ:YELL) is the most popular stock in this table. On the other hand Cheetah Mobile Inc (NYSE:CMCM) is the least popular one with only 4 bullish hedge fund positions. AFC Gamma, Inc. (NASDAQ:AFCG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AFCG is 70. 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 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. Hedge funds were also right about betting on AFCG as the stock returned 9.3% since the end of Q2 (through 9/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
