It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Ameresco Inc (NYSE:AMRC).
Ameresco Inc (NYSE:AMRC) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 7 hedge funds’ portfolios at the end of September, same as at the end of June. 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 Old Second Bancorp Inc. (NASDAQ:OSBC), The Bancorp, Inc. (NASDAQ:TBBK), and Telenav Inc (NASDAQ:TNAV) to gather more data points.
Follow Ameresco Inc. (NYSE:AMRC)
Follow Ameresco Inc. (NYSE:AMRC)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
UbjsP/Shutterstock.com
How have hedgies been trading Ameresco Inc (NYSE:AMRC)?
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, unchanged from one quarter earlier. On the other hand, there were a total of 8 hedge funds with a bullish position in AMRC at the beginning of this year, so hedge fund ownership has dipped by 1 in 2016. 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 Insider Monkey’s hedge fund database, Royce & Associates, led by Chuck Royce, holds the biggest position in Ameresco Inc (NYSE:AMRC). Royce & Associates has a $4.6 million position in the stock. On Royce & Associates’s heels is John A. Levin of Levin Capital Strategies, with a $2.1 million position. Some other hedge funds and institutional investors that are bullish contain Renaissance Technologies, one of the largest hedge funds in the world, John Overdeck and David Siegel’s Two Sigma Advisors, and David E. Shaw’s D E Shaw. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-micro-cap stocks.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions either. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s also examine hedge fund activity in other stocks similar to Ameresco Inc (NYSE:AMRC). We will take a look at Old Second Bancorp Inc. (NASDAQ:OSBC), The Bancorp, Inc. (NASDAQ:TBBK), Telenav Inc (NASDAQ:TNAV), and Eaton Vance Senior Income Trust (NYSE:EVF). This group of stocks’ market values are closest to AMRC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OSBC | 4 | 19998 | -1 |
| TBBK | 11 | 64028 | 0 |
| TNAV | 9 | 52911 | -1 |
| EVF | 3 | 7103 | -1 |
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $8 million in AMRC’s case. The Bancorp, Inc. (NASDAQ:TBBK) is the most popular stock in this table. On the other hand Eaton Vance Senior Income Trust (NYSE:EVF) is the least popular one with only 3 bullish hedge fund positions. Ameresco Inc (NYSE:AMRC) 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. In this regard TBBK might be a better candidate to consider taking a long position in.
Disclosure: None
