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 Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI).
Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) was in 19 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 17. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. ACBI investors should be aware of an increase in hedge fund interest recently. There were 16 hedge funds in our database with ACBI positions at the end of the first quarter. Our calculations also showed that ACBI isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Fred Cummings of Elizabeth Park Capital
With all of this in mind let’s go over the new hedge fund action regarding Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI).
Do Hedge Funds Think ACBI Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from the previous quarter. By comparison, 14 hedge funds held shares or bullish call options in ACBI 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.
Of the funds tracked by Insider Monkey, Michael Price’s MFP Investors has the most valuable position in Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI), worth close to $24.2 million, amounting to 2.7% of its total 13F portfolio. Sitting at the No. 2 spot is Elizabeth Park Capital Management, led by Fred Cummings, holding a $12.7 million position; 4.8% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism consist of Renaissance Technologies, D. E. Shaw’s D E Shaw and Chuck Royce’s Royce & Associates. In terms of the portfolio weights assigned to each position Elizabeth Park Capital Management allocated the biggest weight to Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI), around 4.84% of its 13F portfolio. MFP Investors is also relatively very bullish on the stock, dishing out 2.66 percent of its 13F equity portfolio to ACBI.
As industrywide interest jumped, key money managers were leading the bulls’ herd. Royce & Associates, managed by Chuck Royce, created the biggest position in Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI). Royce & Associates had $6.1 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $0.5 million position during the quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) but similarly valued. These stocks are Nautilus, Inc. (NYSE:NLS), Priority Technology Holdings, Inc. (NASDAQ:PRTH), Fly Leasing Ltd (NYSE:FLY), OncoCyte Corporation (NYSE:OCX), Clearfield, Inc. (NASDAQ:CLFD), Nordic American Tankers Ltd (NYSE:NAT), and Avita Medical Limited (NASDAQ:RCEL). All of these stocks’ market caps match ACBI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NLS | 18 | 52019 | -2 |
| PRTH | 1 | 1713 | 0 |
| FLY | 15 | 121268 | -3 |
| OCX | 15 | 203297 | 1 |
| CLFD | 14 | 56203 | 7 |
| NAT | 6 | 7291 | -4 |
| RCEL | 9 | 64334 | -3 |
| Average | 11.1 | 72304 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.1 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $86 million in ACBI’s case. Nautilus, Inc. (NYSE:NLS) is the most popular stock in this table. On the other hand Priority Technology Holdings, Inc. (NASDAQ:PRTH) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) is more popular among hedge funds. Our overall hedge fund sentiment score for ACBI is 88. 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 returned 24% in 2021 through October 22nd but still managed to beat the market by 1.6 percentage points. Hedge funds were also right about betting on ACBI as the stock returned 10% since the end of June (through 10/22) 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.
Follow Atlantic Capital Bancshares Inc. (NASDAQ:ACBI)
Follow Atlantic Capital Bancshares Inc. (NASDAQ:ACBI)
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Disclosure: None. This article was originally published at Insider Monkey.
