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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 American National BankShares Inc (NASDAQ:AMNB) based on that data.
American National BankShares Inc (NASDAQ:AMNB) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 3 hedge funds' portfolios at the end of March. Our calculations also showed that AMNB isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare AMNB to other stocks including Laredo Petroleum Inc (NYSE:LPI), 9F Inc. (NASDAQ:JFU), and Atlas Technical Consultants, Inc. (NASDAQ:ATCX) to get a better sense of its popularity.
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.
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 $26 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. Now let's go over the fresh hedge fund action surrounding American National BankShares Inc (NASDAQ:AMNB).
Do Hedge Funds Think AMNB Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 3 hedge funds with a bullish position in AMNB 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.
Among these funds, Renaissance Technologies held the most valuable stake in American National BankShares Inc (NASDAQ:AMNB), which was worth $4.8 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $0.4 million worth of shares. Zebra 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 Zebra Capital Management allocated the biggest weight to American National BankShares Inc (NASDAQ:AMNB), around 0.24% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to AMNB.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium Management. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Zebra Capital Management).
Let's now review hedge fund activity in other stocks similar to American National BankShares Inc (NASDAQ:AMNB). We will take a look at Laredo Petroleum Inc (NYSE:LPI), 9F Inc. (NASDAQ:JFU), Atlas Technical Consultants, Inc. (NASDAQ:ATCX), Immunome, Inc. (NASDAQ:IMNM), Ooma Inc (NYSE:OOMA), ProQR Therapeutics NV (NASDAQ:PRQR), and NantHealth, Inc. (NASDAQ:NH). This group of stocks' market caps match AMNB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LPI,14,38152,4 JFU,4,851,1 ATCX,8,35663,1 IMNM,1,11248,-2 OOMA,14,114359,-1 PRQR,18,100912,9 NH,3,467,-3 Average,8.9,43093,1.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.9 hedge funds with bullish positions and the average amount invested in these stocks was $43 million. That figure was $5 million in AMNB's case. ProQR Therapeutics NV (NASDAQ:PRQR) is the most popular stock in this table. On the other hand Immunome, Inc. (NASDAQ:IMNM) is the least popular one with only 1 bullish hedge fund positions. American National BankShares Inc (NASDAQ:AMNB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AMNB is 33.4. 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 AMNB wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); AMNB investors were disappointed as the stock returned 0.3% 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.
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Disclosure: None. This article was originally published at Insider Monkey.