While the market driven by short-term sentiment influenced by the accomodative interest rate environment in the US, virus news and stimulus talks, many smart money investors are starting to get cautious towards the current bull run since March and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 30,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding American National BankShares Inc (NASDAQ:AMNB).
American National BankShares Inc (NASDAQ:AMNB) investors should pay attention to an increase in hedge fund sentiment of late. American National BankShares Inc (NASDAQ:AMNB) was in 4 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that AMNB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: 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 a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to go over the latest hedge fund action encompassing American National BankShares Inc (NASDAQ:AMNB).
How are hedge funds trading American National BankShares Inc (NASDAQ:AMNB)?
Heading into the fourth quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in AMNB 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.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the biggest position in American National BankShares Inc (NASDAQ:AMNB). Renaissance Technologies has a $3.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Israel Englander of Millennium Management, with a $0.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism consist of Thomas Bailard’s Bailard Inc, Ken Griffin’s Citadel Investment Group and . In terms of the portfolio weights assigned to each position Bailard Inc allocated the biggest weight to American National BankShares Inc (NASDAQ:AMNB), around 0.01% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.0036 percent of its 13F equity portfolio to AMNB.
As one would reasonably expect, key hedge funds have jumped into American National BankShares Inc (NASDAQ:AMNB) headfirst. Millennium Management, managed by Israel Englander, initiated the most valuable position in American National BankShares Inc (NASDAQ:AMNB). Millennium Management had $0.3 million invested in the company at the end of the quarter. Thomas Bailard’s Bailard Inc also initiated a $0.2 million position during the quarter.
Let’s go over hedge fund activity in other stocks similar to American National BankShares Inc (NASDAQ:AMNB). We will take a look at GigCapital2, Inc. (NYSE:GIX), Nature’s Sunshine Products Inc (NASDAQ:NATR), Teekay Corporation (NYSE:TK), KalVista Pharmaceuticals, Inc. (NASDAQ:KALV), Genfit SA (NASDAQ:GNFT), Galera Therapeutics, Inc. (NASDAQ:GRTX), and Peabody Energy Corporation (NYSE:BTU). This group of stocks’ market values are closest to AMNB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GIX | 14 | 70977 | 4 |
| NATR | 9 | 90264 | 1 |
| TK | 8 | 11158 | -6 |
| KALV | 15 | 66712 | -3 |
| GNFT | 1 | 150 | -1 |
| GRTX | 7 | 33786 | 0 |
| BTU | 20 | 99928 | -3 |
| Average | 10.6 | 53282 | -1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.6 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $4 million in AMNB’s case. Peabody Energy Corporation (NYSE:BTU) is the most popular stock in this table. On the other hand Genfit SA (NASDAQ:GNFT) is the least popular one with only 1 bullish hedge fund positions. American National BankShares Inc (NASDAQ:AMNB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AMNB is 44.9. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on AMNB as the stock returned 30% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
Follow American National Bankshares Inc. (NASDAQ:AMNB)
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Disclosure: None. This article was originally published at Insider Monkey.
