Is At Home Group Inc. (NYSE:HOME) a good bet right now? We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
At Home Group Inc. (NYSE:HOME) was in 16 hedge funds’ portfolios at the end of September. HOME has experienced an increase in hedge fund interest in recent months. There were 15 hedge funds in our database with HOME positions at the end of the previous quarter. Our calculations also showed that HOME 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.
In the eyes of most traders, hedge funds are viewed as slow, old investment vehicles of yesteryear. While there are over 8000 funds in operation at present, We look at the aristocrats of this club, about 750 funds. It is estimated that this group of investors command the lion’s share of the hedge fund industry’s total capital, and by shadowing their finest investments, Insider Monkey has found a few investment strategies that have historically beaten the market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points annually since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Paul Marshall of Marshall Wace
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. Let’s take a peek at the fresh hedge fund action regarding At Home Group Inc. (NYSE:HOME).
Hedge fund activity in At Home Group Inc. (NYSE:HOME)
At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from the second quarter of 2019. On the other hand, there were a total of 22 hedge funds with a bullish position in HOME a year ago. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Clifford A. Sosin’s CAS Investment Partners has the largest position in At Home Group Inc. (NYSE:HOME), worth close to $80.3 million, amounting to 17.7% of its total 13F portfolio. The second most bullish fund manager is Isomer Partners, led by Mendel Hui, holding a $24.1 million position; 7.8% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions comprise Ari Zweiman’s 683 Capital Partners, Paul Marshall and Ian Wace’s Marshall Wace and Gregg J. Powers’s Private Capital Management. In terms of the portfolio weights assigned to each position CAS Investment Partners allocated the biggest weight to At Home Group Inc. (NYSE:HOME), around 17.73% of its 13F portfolio. Isomer Partners is also relatively very bullish on the stock, dishing out 7.76 percent of its 13F equity portfolio to HOME.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. CAS Investment Partners, managed by Clifford A. Sosin, initiated the biggest position in At Home Group Inc. (NYSE:HOME). CAS Investment Partners had $80.3 million invested in the company at the end of the quarter. Ari Zweiman’s 683 Capital Partners also made a $23.6 million investment in the stock during the quarter. The following funds were also among the new HOME investors: David Rosen’s Rubric Capital Management, Eric Chen’s Antipodean Advisors, and Lee Ainslie’s Maverick Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as At Home Group Inc. (NYSE:HOME) but similarly valued. These stocks are Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH), W&T Offshore, Inc. (NYSE:WTI), Argan, Inc. (NYSEAMEX:AGX), and Heritage-Crystal Clean, Inc. (NASDAQ:HCCI). This group of stocks’ market values are similar to HOME’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RUTH | 16 | 49546 | 0 |
| WTI | 19 | 73231 | -3 |
| AGX | 11 | 73282 | 1 |
| HCCI | 12 | 68416 | 3 |
| Average | 14.5 | 66119 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $201 million in HOME’s case. W&T Offshore, Inc. (NYSE:WTI) is the most popular stock in this table. On the other hand Argan, Inc. (NYSEAMEX:AGX) is the least popular one with only 11 bullish hedge fund positions. At Home Group Inc. (NYSE:HOME) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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. Unfortunately HOME wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on HOME were disappointed as the stock returned -10.8% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
