Concerns over rising interest rates and expected further rate increases have hit several stocks hard during the fourth quarter of 2018. Trends reversed 180 degrees in 2019 amid Powell's pivot and optimistic expectations towards a trade deal with China. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were increasing their overall exposure in the third quarter and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI).
Is Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) an excellent stock to buy now? The best stock pickers are betting on the stock. The number of long hedge fund positions went up by 2 in recent months. Our calculations also showed that ACBI isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of methods stock traders employ to evaluate publicly traded companies. A duo of the best methods are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the best fund managers can trounce the broader indices by a very impressive margin (see the details here).
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's take a look at the fresh hedge fund action surrounding Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI).
How are hedge funds trading Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI)?
At Q3's end, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in ACBI over the last 17 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, MFP Investors held the most valuable stake in Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI), which was worth $16.5 million at the end of the third quarter. On the second spot was Elizabeth Park Capital Management which amassed $16 million worth of shares. Renaissance Technologies, D E Shaw, and AQR Capital Management 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 Elizabeth Park Capital Management allocated the biggest weight to Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI), around 6.3% of its 13F portfolio. MFP Investors is also relatively very bullish on the stock, earmarking 2.28 percent of its 13F equity portfolio to ACBI.
As one would reasonably expect, some big names have been driving this bullishness. Winton Capital Management, managed by David Harding, assembled the most outsized position in Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI). Winton Capital Management had $1.9 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital also initiated a $0.4 million position during the quarter. The other funds with brand new ACBI positions are Ken Griffin's Citadel Investment Group and Peter Muller's PDT Partners.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) but similarly valued. We will take a look at RBB Bancorp (NASDAQ:RBB), American National BankShares Inc (NASDAQ:AMNB), Insteel Industries Inc (NASDAQ:IIIN), and ChemoCentryx Inc (NASDAQ:CCXI). All of these stocks' market caps match ACBI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RBB,9,13681,4 AMNB,2,9232,0 IIIN,3,40438,-3 CCXI,17,64755,0 Average,7.75,32027,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $65 million in ACBI's case. ChemoCentryx Inc (NASDAQ:CCXI) is the most popular stock in this table. On the other hand American National BankShares Inc (NASDAQ:AMNB) is the least popular one with only 2 bullish hedge fund positions. Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on ACBI, though not to the same extent, as the stock returned 9.1% during the first two months of the fourth quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.