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 Amalgamated Bank (NASDAQ:AMAL) based on that data.
Amalgamated Bank (NASDAQ:AMAL) investors should pay attention to an increase in hedge fund interest in recent months. AMAL was in 12 hedge funds’ portfolios at the end of the third quarter of 2019. There were 7 hedge funds in our database with AMAL holdings at the end of the previous quarter. Our calculations also showed that AMAL 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Phill Gross of Adage 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 new hedge fund action surrounding Amalgamated Bank (NASDAQ:AMAL).
How are hedge funds trading Amalgamated Bank (NASDAQ:AMAL)?
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 71% from the previous quarter. On the other hand, there were a total of 9 hedge funds with a bullish position in AMAL a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Amalgamated Bank (NASDAQ:AMAL) was held by Invesco Private Capital (WL Ross), which reported holding $24.1 million worth of stock at the end of September. It was followed by Adage Capital Management with a $12.8 million position. Other investors bullish on the company included Mendon Capital Advisors, Azora Capital, and Millennium Management. In terms of the portfolio weights assigned to each position Invesco Private Capital (WL Ross) allocated the biggest weight to Amalgamated Bank (NASDAQ:AMAL), around 6.59% of its 13F portfolio. Mendon Capital Advisors is also relatively very bullish on the stock, designating 1.82 percent of its 13F equity portfolio to AMAL.
As one would reasonably expect, key money managers have been driving this bullishness. Paloma Partners, managed by Donald Sussman, created the most valuable position in Amalgamated Bank (NASDAQ:AMAL). Paloma Partners had $0.4 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.3 million position during the quarter. The following funds were also among the new AMAL investors: Michael Gelband’s ExodusPoint Capital, John Overdeck and David Siegel’s Two Sigma Advisors, and David E. Shaw’s D E Shaw.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Amalgamated Bank (NASDAQ:AMAL) but similarly valued. We will take a look at Energy Recovery, Inc. (NASDAQ:ERII), Ethan Allen Interiors Inc. (NYSE:ETH), Changyou.Com Limited (NASDAQ:CYOU), and Gores Metropoulos, Inc. (NASDAQ:GMHI). This group of stocks’ market values resemble AMAL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ERII | 10 | 47610 | 0 |
| ETH | 14 | 62893 | -2 |
| CYOU | 13 | 38009 | 4 |
| GMHI | 19 | 163294 | -1 |
| Average | 14 | 77952 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $78 million. That figure was $61 million in AMAL’s case. Gores Metropoulos, Inc. (NASDAQ:GMHI) is the most popular stock in this table. On the other hand Energy Recovery, Inc. (NASDAQ:ERII) is the least popular one with only 10 bullish hedge fund positions. Amalgamated Bank (NASDAQ:AMAL) is not the least popular stock in this group but hedge fund interest is still below 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. A small number of hedge funds were also right about betting on AMAL as the stock returned 19.9% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
