Is AE Stock A Buy Here?
Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the fourth quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Adams Resources & Energy Inc (NYSE:AE) based on that data.
Is AE stock a buy here? Adams Resources & Energy Inc (NYSE:AE) investors should pay attention to an increase in hedge fund sentiment recently. Adams Resources & Energy Inc (NYSE:AE) was in 4 hedge funds' portfolios at the end of March. The all time high for this statistic is 6. Our calculations also showed that AE isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Roger Ibbotson of Zebra Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $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. Keeping this in mind we're going to analyze the new hedge fund action surrounding Adams Resources & Energy Inc (NYSE:AE).
Do Hedge Funds Think AE Is A Good Stock To Buy Now?
At first quarter's end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from one quarter earlier. On the other hand, there were a total of 4 hedge funds with a bullish position in AE 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.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the biggest position in Adams Resources & Energy Inc (NYSE:AE), worth close to $7.6 million, amounting to less than 0.1%% of its total 13F portfolio. Coming in second is Ancora Advisors, led by Frederick DiSanto, holding a $2.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism consist of David P. Cohen's Minerva Advisors, Roger Ibbotson's Zebra Capital Management and . In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Adams Resources & Energy Inc (NYSE:AE), around 0.45% of its 13F portfolio. Minerva Advisors is also relatively very bullish on the stock, earmarking 0.23 percent of its 13F equity portfolio to AE.
With a general bullishness amongst the heavyweights, some big names have jumped into Adams Resources & Energy Inc (NYSE:AE) headfirst. Zebra Capital Management, managed by Roger Ibbotson, established the biggest position in Adams Resources & Energy Inc (NYSE:AE). Zebra Capital Management had $0.4 million invested in the company at the end of the quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Adams Resources & Energy Inc (NYSE:AE) but similarly valued. We will take a look at Qumu Corp (NASDAQ:QUMU), Assertio Holdings Inc. (NASDAQ:ASRT), Performant Financial Corp (NASDAQ:PFMT), TDH Holdings, Inc. (NASDAQ:PETZ), OFS Capital Corp (NASDAQ:OFS), Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS), and Prudential Bancorp, Inc. (NASDAQ:PBIP). This group of stocks' market valuations resemble AE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position QUMU,6,21007,1 ASRT,6,7725,-1 PFMT,7,39551,4 PETZ,2,484,1 OFS,3,451,1 CRVS,11,50567,5 PBIP,1,5992,-1 Average,5.1,17968,1.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.1 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $11 million in AE's case. Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) is the most popular stock in this table. On the other hand Prudential Bancorp, Inc. (NASDAQ:PBIP) is the least popular one with only 1 bullish hedge fund positions. Adams Resources & Energy Inc (NYSE:AE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AE is 41. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately AE wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); AE investors were disappointed as the stock returned 5.3% since the end of March (through 6/11) 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 in 2021.
Get real-time email alerts: Follow Adams Resources & Energy Inc. (NYSE:AE)
Disclosure: None. This article was originally published at Insider Monkey.
Related Content
