In this article you are going to find out whether hedge funds think AmeriServ Financial, Inc. (NASDAQ:ASRV) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
AmeriServ Financial, Inc. (NASDAQ:ASRV) was in 3 hedge funds’ portfolios at the end of March. ASRV investors should pay attention to a decrease in activity from the world’s largest hedge funds recently. There were 4 hedge funds in our database with ASRV holdings at the end of the previous quarter. Our calculations also showed that ASRV isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 44 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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Jim Simons Founder of Renaissance Technologies
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s review the latest hedge fund action encompassing AmeriServ Financial, Inc. (NASDAQ:ASRV).
Hedge fund activity in AmeriServ Financial, Inc. (NASDAQ:ASRV)
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ASRV over the last 18 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in AmeriServ Financial, Inc. (NASDAQ:ASRV), which was worth $2 million at the end of the third quarter. On the second spot was Tontine Asset Management which amassed $1.9 million worth of shares. Minerva Advisors was also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Tontine Asset Management allocated the biggest weight to AmeriServ Financial, Inc. (NASDAQ:ASRV), around 0.58% of its 13F portfolio. Minerva Advisors is also relatively very bullish on the stock, earmarking 0.23 percent of its 13F equity portfolio to ASRV.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Arrowstreet Capital. 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 ASRV as a viable investment and initiated a position in the stock.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as AmeriServ Financial, Inc. (NASDAQ:ASRV) but similarly valued. We will take a look at Travelzoo (NASDAQ:TZOO), Infrastructure and Energy Alternatives, Inc. (NASDAQ:IEA), KBL Merger Corp. IV (NASDAQ:KBLM), and Aviat Networks Inc (NASDAQ:AVNW). All of these stocks’ market caps are similar to ASRV’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TZOO | 11 | 5687 | 3 |
| IEA | 6 | 2546 | 0 |
| KBLM | 4 | 368 | 0 |
| AVNW | 5 | 9875 | 0 |
| Average | 6.5 | 4619 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $4 million in ASRV’s case. Travelzoo (NASDAQ:TZOO) is the most popular stock in this table. On the other hand KBL Merger Corp. IV (NASDAQ:KBLM) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks AmeriServ Financial, Inc. (NASDAQ:ASRV) is even less popular than KBLM. Hedge funds dodged a bullet by taking a bearish stance towards ASRV. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd but managed to beat the market by 15.6 percentage points. Unfortunately ASRV wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); ASRV investors were disappointed as the stock returned 10.8% during the second quarter (through May 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.
