Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and investors’ positions as of the end of the fourth quarter. You can find write-ups 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 and analyze what the smart money thinks of Associated Capital Group, Inc. (NYSE:AC) based on that data.
Hedge fund interest in Associated Capital Group, Inc. (NYSE:AC) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare AC to other stocks including PC Connection, Inc. (NASDAQ:CNXN), Kenon Holdings Ltd. (NYSE:KEN), and Grupo Supervielle S.A. (NYSE:SUPV) to get a better sense of its popularity.
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 market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to analyze the new hedge fund action surrounding Associated Capital Group, Inc. (NYSE:AC).
Hedge fund activity in Associated Capital Group, Inc. (NYSE:AC)
At the end of the fourth quarter, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 4 hedge funds with a bullish position in AC a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Horizon Asset Management was the largest shareholder of Associated Capital Group, Inc. (NYSE:AC), with a stake worth $53.6 million reported as of the end of December. Trailing Horizon Asset Management was Royce & Associates, which amassed a stake valued at $6.9 million. Renaissance Technologies and Millennium Management were also very fond of the stock, giving the stock large weights in their portfolios.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Ancora 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 only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Millennium Management).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Associated Capital Group, Inc. (NYSE:AC) but similarly valued. These stocks are PC Connection, Inc. (NASDAQ:CNXN), Kenon Holdings Ltd. (NYSE:KEN), Grupo Supervielle S.A. (NYSE:SUPV), and Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH). This group of stocks’ market values match AC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNXN | 6 | 39609 | -2 |
| KEN | 1 | 1200 | 0 |
| SUPV | 10 | 43989 | 0 |
| DCPH | 15 | 171040 | -1 |
| Average | 8 | 63960 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $64 million. That figure was $61 million in AC’s case. Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH) is the most popular stock in this table. On the other hand Kenon Holdings Ltd. (NYSE:KEN) is the least popular one with only 1 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately AC wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); AC investors were disappointed as the stock returned 14% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
