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 second 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 5 years and analyze what the smart money thinks of Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) based on that data and determine whether they were really smart about the stock.
Is Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) the right pick for your portfolio? Money managers were becoming more confident. The number of long hedge fund positions moved up by 9 lately. Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) was in 26 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 22. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that AAWW isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 56 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 34% through August 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David Einhorn of Greenlight Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. With all of this in mind we're going to take a peek at the key hedge fund action surrounding Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW).
Hedge fund activity in Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW)
At second quarter's end, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 53% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AAWW over the last 20 quarters. So, let's see 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, Greenlight Capital, managed by David Einhorn, holds the most valuable position in Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW). Greenlight Capital has a $61 million position in the stock, comprising 6.6% of its 13F portfolio. The second largest stake is held by Maple Rock Capital, managed by Len Kipp and Xavier Majic, which holds a $27.3 million position; 5.5% of its 13F portfolio is allocated to the stock. Other peers that are bullish encompass Ken Fisher's Fisher Asset Management, Robert Bishop's Impala Asset Management and Chuck Royce's Royce & Associates. In terms of the portfolio weights assigned to each position Greenlight Capital allocated the biggest weight to Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), around 6.61% of its 13F portfolio. Maple Rock Capital is also relatively very bullish on the stock, dishing out 5.46 percent of its 13F equity portfolio to AAWW.
As aggregate interest increased, some big names have jumped into Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) headfirst. Greenlight Capital, managed by David Einhorn, established the most outsized position in Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW). Greenlight Capital had $61 million invested in the company at the end of the quarter. Len Kipp and Xavier Majic's Maple Rock Capital also initiated a $27.3 million position during the quarter. The following funds were also among the new AAWW investors: Jonathan Barrett and Paul Segal's Luminus Management, Richard Driehaus's Driehaus Capital, and Ira Unschuld's Brant Point Investment Management.
Let's go over hedge fund activity in other stocks similar to Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW). We will take a look at Athenex, Inc. (NASDAQ:ATNX), Acadia Realty Trust (NYSE:AKR), K12 Inc. (NYSE:LRN), Cadence Bancorporation (NYSE:CADE), Pliant Therapeutics, Inc. (NASDAQ:PLRX), The RealReal, Inc. (NASDAQ:REAL), and Calavo Growers, Inc. (NASDAQ:CVGW). This group of stocks' market values are similar to AAWW's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ATNX,18,337012,3 AKR,16,49134,2 LRN,18,157534,-2 CADE,21,109996,-8 PLRX,13,241772,13 REAL,19,201408,4 CVGW,14,78053,3 Average,17,167844,2.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $168 million. That figure was $199 million in AAWW's case. Cadence Bancorporation (NYSE:CADE) is the most popular stock in this table. On the other hand Pliant Therapeutics, Inc. (NASDAQ:PLRX) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) is more popular among hedge funds. Our overall hedge fund sentiment score for AAWW is 90. 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. 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 21.3% in 2020 through September 25th but still managed to beat the market by 17.7 percentage points. Hedge funds were also right about betting on AAWW as the stock returned 40% since the end of June 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.
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Disclosure: None. This article was originally published at Insider Monkey.