Hedge Funds Are Selling Associated Capital Group, Inc. (AC)

With the first-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 second quarter of 2021. One of these stocks was Associated Capital Group, Inc. (NYSE:AC).

Is Associated Capital Group, Inc. (NYSE:AC) worth your attention right now? Hedge funds were reducing their bets on the stock. The number of bullish hedge fund bets were trimmed by 1 in recent months. Associated Capital Group, Inc. (NYSE:AC) was in 4 hedge funds’ portfolios at the end of March. The all time high for this statistic is 8. Our calculations also showed that AC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 5 hedge funds in our database with AC holdings at the end of December.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Mario Gabelli of GAMCO Investors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $27 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to analyze the fresh hedge fund action surrounding Associated Capital Group, Inc. (NYSE:AC).

Do Hedge Funds Think AC Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from one quarter earlier. On the other hand, there were a total of 6 hedge funds with a bullish position in AC a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Horizon Asset Management, managed by Murray Stahl, holds the largest position in Associated Capital Group, Inc. (NYSE:AC). Horizon Asset Management has a $46.1 million position in the stock, comprising 1% of its 13F portfolio. Sitting at the No. 2 spot is GAMCO Investors, managed by Mario Gabelli, which holds a $2.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism consist of Renaissance Technologies, Chuck Royce’s Royce & Associates and . In terms of the portfolio weights assigned to each position Horizon Asset Management allocated the biggest weight to Associated Capital Group, Inc. (NYSE:AC), around 1.04% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, earmarking 0.03 percent of its 13F equity portfolio to AC.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Omega Advisors. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified AC as a viable investment and initiated a position in the stock.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Associated Capital Group, Inc. (NYSE:AC) but similarly valued. We will take a look at Merus N.V. (NASDAQ:MRUS), Altabancorp (NASDAQ:ALTA), First Mid Bancshares, Inc. (NASDAQ:FMBH), Harmonic Inc (NASDAQ:HLIT), VBI Vaccines, Inc. (NASDAQ:VBIV), CAI International Inc (NYSE:CAI), and Corporacion America Airports SA (NYSE:CAAP). This group of stocks’ market caps resemble AC’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.1 hedge funds with bullish positions and the average amount invested in these stocks was $102 million. That figure was $50 million in AC’s case. Merus N.V. (NASDAQ:MRUS) is the most popular stock in this table. On the other hand First Mid Bancshares, Inc. (NASDAQ:FMBH) is the least popular one with only 2 bullish hedge fund positions. Associated Capital Group, Inc. (NYSE:AC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AC is 23.8. 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 17.2% in 2021 through June 11th and beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on AC, though not to the same extent, as the stock returned 7.6% since the end of Q1 (through June 11th) and outperformed the market.

Disclosure: None. This article was originally published at Insider Monkey.