We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of December. At Insider Monkey, we follow nearly 835 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Amerisafe, Inc. (NASDAQ:AMSF), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Amerisafe, Inc. (NASDAQ:AMSF) a first-rate investment right now? The best stock pickers are getting less optimistic. The number of bullish hedge fund bets fell by 4 recently. Our calculations also showed that AMSF isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
Ken Fisher of Fisher Asset Management
We leave no stone unturned when looking for the next great investment idea. For example, COVID-19 pandemic is still the main driver of stock prices. So we are checking out this trader’s corona catalyst trades. 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. Keeping this in mind let’s analyze the fresh hedge fund action regarding Amerisafe, Inc. (NASDAQ:AMSF).
What have hedge funds been doing with Amerisafe, Inc. (NASDAQ:AMSF)?
Heading into the first quarter of 2020, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AMSF over the last 18 quarters. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the number one position in Amerisafe, Inc. (NASDAQ:AMSF). Renaissance Technologies has a $17.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which holds a $5.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that hold long positions consist of John Overdeck and David Siegel’s Two Sigma Advisors, David Harding’s Winton Capital Management and Ken Fisher’s Fisher Asset Management. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Amerisafe, Inc. (NASDAQ:AMSF), around 0.04% of its 13F portfolio. Driehaus Capital is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to AMSF.
Because Amerisafe, Inc. (NASDAQ:AMSF) has faced falling interest from the aggregate hedge fund industry, we can see that there lies a certain “tier” of money managers who sold off their full holdings heading into Q4. Interestingly, D. E. Shaw’s D E Shaw said goodbye to the largest investment of the “upper crust” of funds tracked by Insider Monkey, valued at an estimated $1.9 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund dumped about $0.5 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 4 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks similar to Amerisafe, Inc. (NASDAQ:AMSF). These stocks are Health Catalyst, Inc (NASDAQ:HCAT), The E.W. Scripps Company (NYSE:SSP), SM Energy Company (NYSE:SM), and Benchmark Electronics, Inc. (NYSE:BHE). This group of stocks’ market caps resemble AMSF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HCAT | 8 | 37534 | -5 |
| SSP | 12 | 149633 | -5 |
| SM | 22 | 126463 | 1 |
| BHE | 19 | 52735 | 4 |
| Average | 15.25 | 91591 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $92 million. That figure was $35 million in AMSF’s case. SM Energy Company (NYSE:SM) is the most popular stock in this table. On the other hand Health Catalyst, Inc (NASDAQ:HCAT) is the least popular one with only 8 bullish hedge fund positions. Amerisafe, Inc. (NASDAQ:AMSF) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 1.0% in 2020 through May 1st but beat the market by 12.9 percentage points. A small number of hedge funds were also right about betting on AMSF, though not to the same extent, as the stock returned -4.9% during the same time period and outperformed the market.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
