In this article we will check out the progression of hedge fund sentiment towards Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) an exceptional stock to buy now? The smart money is buying. The number of long hedge fund positions improved by 2 recently. Our calculations also showed that AAWW isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). AAWW was in 17 hedge funds' portfolios at the end of March. There were 15 hedge funds in our database with AAWW positions at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_735677" align="aligncenter" width="398"] Sander Gerber of Hudson Bay Capital[/caption]
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. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. 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 the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's take a glance at the fresh hedge fund action surrounding Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW).
How have hedgies been trading Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW)?
Heading into the second quarter of 2020, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the previous quarter. On the other hand, there were a total of 19 hedge funds with a bullish position in AAWW a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Fisher Asset Management held the most valuable stake in Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), which was worth $12.5 million at the end of the third quarter. On the second spot was Royce & Associates which amassed $8.1 million worth of shares. Point72 Asset Management, Impala Asset Management, and Citadel Investment Group 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 Invenomic Capital Management allocated the biggest weight to Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), around 3.38% of its 13F portfolio. Impala Asset Management is also relatively very bullish on the stock, earmarking 1.07 percent of its 13F equity portfolio to AAWW.
Now, some big names were breaking ground themselves. Point72 Asset Management, managed by Steve Cohen, created the biggest position in Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW). Point72 Asset Management had $8 million invested in the company at the end of the quarter. Robert Bishop's Impala Asset Management also made a $7.9 million investment in the stock during the quarter. The other funds with brand new AAWW positions are Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Sander Gerber's Hudson Bay Capital Management, and John Overdeck and David Siegel's Two Sigma Advisors.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) but similarly valued. These stocks are MAG Silver Corporation (NYSE:MAG), JinkoSolar Holding Co., Ltd. (NYSE:JKS), Cryolife Inc (NYSE:CRY), and New Mountain Finance Corp. (NYSE:NMFC). This group of stocks' market caps resemble AAWW's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MAG,8,80264,-2 JKS,7,41159,-5 CRY,7,35479,-3 NMFC,13,13539,-4 Average,8.75,42610,-3.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $43 million. That figure was $57 million in AAWW's case. New Mountain Finance Corp. (NYSE:NMFC) is the most popular stock in this table. On the other hand JinkoSolar Holding Co., Ltd. (NYSE:JKS) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) is more popular among hedge funds. 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 returned 13.4% in 2020 through June 22nd but still managed to beat the market by 15.9 percentage points. Hedge funds were also right about betting on AAWW as the stock returned 57.7% so far in Q2 (through June 22nd) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.