Where Do Hedge Funds Stand On Hall of Fame Resort & Entertainment Company (HOFV)?

At Insider Monkey, we pore over the filings of nearly 866 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of March 31st. In this article, we will use that wealth of knowledge to determine whether or not Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) makes for a good investment right now.

Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) has seen a decrease in hedge fund sentiment of late. Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) was in 6 hedge funds’ portfolios at the end of March. The all time high for this statistic is 7. There were 7 hedge funds in our database with HOFV positions at the end of the fourth quarter. Our calculations also showed that HOFV isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Sander Gerber of Hudson Bay Capital

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. With all of this in mind we’re going to take a look at the key hedge fund action surrounding Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV).

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

At the end of March, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in HOFV a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Hudson Bay Capital Management was the largest shareholder of Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV), with a stake worth $10.7 million reported as of the end of March. Trailing Hudson Bay Capital Management was Ionic Capital Management, which amassed a stake valued at $0.8 million. Citadel Investment Group, Ancora Advisors, and Ardsley Partners 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 Hudson Bay Capital Management allocated the biggest weight to Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV), around 0.13% of its 13F portfolio. Ionic Capital Management is also relatively very bullish on the stock, earmarking 0.11 percent of its 13F equity portfolio to HOFV.

Because Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) has faced bearish sentiment from the smart money, it’s safe to say that there exists a select few hedgies that elected to cut their full holdings last quarter. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the largest investment of the 750 funds monitored by Insider Monkey, comprising about $0.1 million in stock. Nick Thakore’s fund, Diametric Capital, also dumped its stock, about $0.1 million worth. These transactions are interesting, as total hedge fund interest dropped by 1 funds last quarter.

Let’s now review hedge fund activity in other stocks similar to Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV). We will take a look at Sientra Inc (NASDAQ:SIEN), Concrete Pumping Holdings, Inc. (NASDAQ:BBCP), Barnes & Noble Education Inc (NYSE:BNED), DZS Inc. (NASDAQ:DZSI), Adicet Bio Inc. (NASDAQ:ACET), Verrica Pharmaceuticals Inc. (NASDAQ:VRCA), and CNB Financial Corporation (NASDAQ:CCNE). All of these stocks’ market caps are closest to HOFV’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.6 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was $13 million in HOFV’s case. Sientra Inc (NASDAQ:SIEN) is the most popular stock in this table. On the other hand Verrica Pharmaceuticals Inc. (NASDAQ:VRCA) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) is even less popular than VRCA. Our overall hedge fund sentiment score for HOFV is 29.7. 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 HOFV. 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 HOFV wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); HOFV investors were disappointed as the stock returned -10.2% 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.