As we already know from media reports and hedge fund investor letters, many hedge funds lost money in the third quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish theses and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about Alliance Holdings GP, L.P. (NASDAQ:AHGP) in this article.
Alliance Holdings GP, L.P. (NASDAQ:AHGP) was in seven hedge funds’ portfolios at the end of September. AHGP investors should be aware of an increase in hedge fund sentiment of late. There were 6 hedge funds in our database with AHGP holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as The Dolan Company (NYSE:DM), Masonite International Corp (NYSE:DOOR), and Copa Holdings, S.A. (NYSE:CPA) to gather more data points.
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According to most stock holders, hedge funds are viewed as underperforming, old financial vehicles of the past. While there are greater than an 8000 funds trading today, Our experts look at the masters of this group, about 700 funds. These hedge fund managers orchestrate most of all hedge funds’ total capital, and by tracking their highest performing picks, Insider Monkey has unearthed a number of investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per year for a decade in their back tests.
Keeping this in mind, let’s view the fresh action surrounding Alliance Holdings GP, L.P. (NASDAQ:AHGP).
What have hedge funds been doing with Alliance Holdings GP, L.P. (NASDAQ:AHGP)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Matthew Hulsizer’s PEAK6 Capital Management has the biggest call position in Alliance Holdings GP, L.P. (NASDAQ:AHGP), worth close to $9.1 million, corresponding to less than 0.1%% of its total 13F portfolio. The second largest stake is held by Selz Capital, led by Bernard Selz, holding a $8.2 million position; 2.3% of its 13F portfolio is allocated to the company. Remaining professional money managers that are bullish comprise Jim Simons’ Renaissance Technologies, Roger Ibbotson’s Zebra Capital Management and George Hall’s Clinton Group.
With a general bullishness amongst the heavyweights, key money managers have jumped into Alliance Holdings GP, L.P. (NASDAQ:AHGP) headfirst. Citadel Investment Group, managed by Ken Griffin, established the largest position in Alliance Holdings GP, L.P. (NASDAQ:AHGP). Citadel Investment Group had $0.2 million invested in the company at the end of the quarter. The only other fund with a brand new AHGP position is David Dreman’s Dreman Value Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Alliance Holdings GP, L.P. (NASDAQ:AHGP) but similarly valued. These stocks are The Dolan Company (NYSE:DM), Masonite International Corp (NYSE:DOOR), Copa Holdings, S.A. (NYSE:CPA), and Calumet Specialty Products Partners, L.P (NASDAQ:CLMT). This group of stocks’ market caps resemble AHGP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DM | 6 | 13093 | 1 |
| DOOR | 28 | 553480 | 1 |
| CPA | 14 | 164856 | -4 |
| CLMT | 8 | 22180 | 0 |
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 $188 million, as compared to $21 million in AHGP’s case. Masonite International Corp (NYSE:DOOR) is the most popular stock in this table, while The Dolan Company (NYSE:DM) is the least popular one with only 6 bullish hedge fund positions. Alliance Holdings GP, L.P. (NASDAQ:AHGP) is not the least popular stock in this group, but the 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. In this regard DOOR might be a better candidate to consider for a long position.
