Should I Avoid ATN International, Inc. (ATNI)?

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of ATN International, Inc. (NASDAQ:ATNI).

ATN International, Inc. (NASDAQ:ATNI) was in 6 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 10. ATNI investors should be aware of a decrease in activity from the world’s largest hedge funds recently. There were 8 hedge funds in our database with ATNI holdings at the end of December. Our calculations also showed that ATNI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

Martin Whitman of Third Avenue Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s take a gander at the recent hedge fund action regarding ATN International, Inc. (NASDAQ:ATNI).

Do Hedge Funds Think ATNI Is A Good Stock To Buy Now?

At Q1’s end, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of -25% from the previous quarter. On the other hand, there were a total of 8 hedge funds with a bullish position in ATNI a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

Among these funds, Renaissance Technologies held the most valuable stake in ATN International, Inc. (NASDAQ:ATNI), which was worth $27 million at the end of the fourth quarter. On the second spot was Royce & Associates which amassed $13.9 million worth of shares. Third Avenue Management, D E Shaw, and Engineers Gate Manager were 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 Third Avenue Management allocated the biggest weight to ATN International, Inc. (NASDAQ:ATNI), around 0.61% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, designating 0.09 percent of its 13F equity portfolio to ATNI.

Since ATN International, Inc. (NASDAQ:ATNI) has witnessed bearish sentiment from hedge fund managers, it’s safe to say that there were a few hedgies who sold off their entire stakes heading into Q2. Interestingly, Ken Griffin’s Citadel Investment Group sold off the biggest investment of all the hedgies monitored by Insider Monkey, worth about $1.1 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund dropped about $0.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 2 funds heading into Q2.

Let’s now take a look at hedge fund activity in other stocks similar to ATN International, Inc. (NASDAQ:ATNI). We will take a look at Cincinnati Bell Inc. (NYSE:CBB), Contango Oil & Gas Company (NYSE:MCF), Great Southern Bancorp, Inc. (NASDAQ:GSBC), Thryv Holdings, Inc. (NASDAQ:THRY), Veritone, Inc. (NASDAQ:VERI), ZIOPHARM Oncology Inc. (NASDAQ:ZIOP), and SurModics, Inc. (NASDAQ:SRDX). This group of stocks’ market caps are similar to ATNI’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.6 hedge funds with bullish positions and the average amount invested in these stocks was $168 million. That figure was $47 million in ATNI’s case. Veritone, Inc. (NASDAQ:VERI) is the most popular stock in this table. On the other hand Contango Oil & Gas Company (NYSE:MCF) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks ATN International, Inc. (NASDAQ:ATNI) is even less popular than MCF. Our overall hedge fund sentiment score for ATNI is 21. 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. Hedge funds dodged a bullet by taking a bearish stance towards ATNI. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th but managed to beat the market again by 4.8 percentage points. Unfortunately ATNI wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); ATNI investors were disappointed as the stock returned -3.4% since the end of the first quarter (through 6/25) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.

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