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Do Hedge Funds Love ATN International, Inc. (ATNI)?

Asma UL Husna

We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds' top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like ATN International, Inc. (NASDAQ:ATNI).

Hedge fund interest in ATN International, Inc. (NASDAQ:ATNI) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare ATNI to other stocks including Antero Resources Corp (NYSE:AR), Century Communities, Inc (NYSE:CCS), and Luminex Corporation (NASDAQ:LMNX) to get a better sense of its popularity. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

5 Most Popular Stocks Among Hedge Funds

In today’s marketplace there are tons of indicators investors use to value publicly traded companies. A couple of the less utilized indicators are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can beat the S&P 500 by a healthy margin (see the details here).

[caption id="attachment_758450" align="aligncenter" width="450"] Martin Whitman of Third Avenue Management[/caption]

Martin Whitman Third Avenue Management Marty Whitman

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 peek at the fresh hedge fund action encompassing ATN International, Inc. (NASDAQ:ATNI).

Hedge fund activity in ATN International, Inc. (NASDAQ:ATNI)

Heading into the fourth quarter of 2019, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in ATNI over the last 17 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the most valuable position in ATN International, Inc. (NASDAQ:ATNI), worth close to $40.9 million, accounting for less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Chuck Royce of Royce & Associates, with a $9.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers that are bullish contain Martin Whitman's Third Avenue Management, Cliff Asness's AQR Capital Management and David E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position Third Avenue Management allocated the biggest weight to ATN International, Inc. (NASDAQ:ATNI), around 0.72% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, earmarking 0.09 percent of its 13F equity portfolio to ATNI.

Because ATN International, Inc. (NASDAQ:ATNI) has faced falling interest from hedge fund managers, it's safe to say that there is a sect of fund managers that slashed their full holdings by the end of the third quarter. Intriguingly, Peter Muller's PDT Partners sold off the biggest position of the 750 funds monitored by Insider Monkey, totaling an estimated $0.4 million in stock. Israel Englander's fund, Millennium Management, also dumped its stock, about $0.2 million worth. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let's now review hedge fund activity in other stocks similar to ATN International, Inc. (NASDAQ:ATNI). These stocks are Antero Resources Corp (NYSE:AR), Century Communities, Inc (NYSE:CCS), Luminex Corporation (NASDAQ:LMNX), and Intrexon Corp (NASDAQ:XON). This group of stocks' market values are similar to ATNI's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AR,26,354639,-4 CCS,23,158792,6 LMNX,14,151826,-3 XON,12,61604,2 Average,18.75,181715,0.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $182 million. That figure was $66 million in ATNI's case. Antero Resources Corp (NYSE:AR) is the most popular stock in this table. On the other hand Intrexon Corp (NASDAQ:XON) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks ATN International, Inc. (NASDAQ:ATNI) is even less popular than XON. Hedge funds dodged a bullet by taking a bearish stance towards ATNI. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately ATNI wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); ATNI investors were disappointed as the stock returned -3.8% during the fourth quarter (through the end of November) 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 70 percent of these stocks already outperformed the market so far in Q4.

Disclosure: None. This article was originally published at Insider Monkey.

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