Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 817 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV).
Is Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) a first-rate stock to buy now? The best stock pickers were getting more bullish. The number of long hedge fund bets improved by 3 in recent months. Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) was in 3 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that HOFV isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Bart Baum of Ionic Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website.Now let’s analyze the latest hedge fund action surrounding Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV).
How have hedgies been trading Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV)?
At third quarter’s end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3 from one quarter earlier. By comparison, 0 hedge funds held shares or bullish call options in HOFV a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Arrowstreet Capital was the largest shareholder of Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV), with a stake worth $0.4 million reported as of the end of September. Trailing Arrowstreet Capital was Coe Capital Management, which amassed a stake valued at $0.1 million. Ionic Capital Management was 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 Coe Capital Management allocated the biggest weight to Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV), around 0.08% of its 13F portfolio. Ionic Capital Management is also relatively very bullish on the stock, setting aside 0.0037 percent of its 13F equity portfolio to HOFV.
As one would reasonably expect, key hedge funds were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most valuable position in Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV). Arrowstreet Capital had $0.4 million invested in the company at the end of the quarter. Mark Coe’s Coe Capital Management also made a $0.1 million investment in the stock during the quarter. The only other fund with a new position in the stock is Bart Baum’s Ionic Capital Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) but similarly valued. We will take a look at Old Point Financial Corporation (NASDAQ:OPOF), Limestone Bancorp, Inc. (NASDAQ:LMST), Lake Shore Bancorp, Inc. (NASDAQ:LSBK), Lifeway Foods, Inc. (NASDAQ:LWAY), J Alexander’s Holdings Inc (NYSE:JAX), OncoSec Medical Incorporated (NASDAQ:ONCS), and Blue Ridge Bankshares, Inc. (NYSE:BRBS). This group of stocks’ market valuations are closest to HOFV’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OPOF | 2 | 2006 | -1 |
| LMST | 2 | 3897 | 0 |
| LSBK | 1 | 353 | 0 |
| LWAY | 4 | 2691 | 1 |
| JAX | 10 | 13023 | -3 |
| ONCS | 5 | 1783 | 2 |
| BRBS | 2 | 1137 | 0 |
| Average | 3.7 | 3556 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.7 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $0 million in HOFV’s case. J Alexander’s Holdings Inc (NYSE:JAX) is the most popular stock in this table. On the other hand Lake Shore Bancorp, Inc. (NASDAQ:LSBK) is the least popular one with only 1 bullish hedge fund positions. Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HOFV is 25.8. 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. This is a slightly negative signal and 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 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and surpassed the market again by 15.4 percentage points. Unfortunately HOFV wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); HOFV investors were disappointed as the stock returned -44.2% since the end of September (through 11/23) 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 most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.