In this article we will check out the progression of hedge fund sentiment towards Air Transport Services Group Inc. (NASDAQ:ATSG) 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.
Air Transport Services Group Inc. (NASDAQ:ATSG) was in 22 hedge funds' portfolios at the end of March. ATSG investors should pay attention to an increase in support from the world's most elite money managers lately. There were 20 hedge funds in our database with ATSG positions at the end of the previous quarter. Our calculations also showed that ATSG 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). Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_26794" align="aligncenter" width="359"] Paul Tudor Jones of Tudor Investment Corp[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. 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. Now we're going to take a glance at the new hedge fund action regarding Air Transport Services Group Inc. (NASDAQ:ATSG).
What have hedge funds been doing with Air Transport Services Group Inc. (NASDAQ:ATSG)?
At the end of the first quarter, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the previous quarter. On the other hand, there were a total of 18 hedge funds with a bullish position in ATSG a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
The largest stake in Air Transport Services Group Inc. (NASDAQ:ATSG) was held by Moab Capital Partners, which reported holding $35.6 million worth of stock at the end of September. It was followed by Polar Capital with a $25 million position. Other investors bullish on the company included Private Capital Management, Prescott Group Capital Management, and D E Shaw. In terms of the portfolio weights assigned to each position Moab Capital Partners allocated the biggest weight to Air Transport Services Group Inc. (NASDAQ:ATSG), around 14.77% of its 13F portfolio. Private Capital Management is also relatively very bullish on the stock, dishing out 6.78 percent of its 13F equity portfolio to ATSG.
With a general bullishness amongst the heavyweights, some big names were leading the bulls' herd. Intrinsic Edge Capital, managed by Mark Coe, assembled the most valuable position in Air Transport Services Group Inc. (NASDAQ:ATSG). Intrinsic Edge Capital had $5.4 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace's Marshall Wace LLP also made a $0.6 million investment in the stock during the quarter. The other funds with brand new ATSG positions are Paul Tudor Jones's Tudor Investment Corp and Greg Eisner's Engineers Gate Manager.
Let's now take a look at hedge fund activity in other stocks similar to Air Transport Services Group Inc. (NASDAQ:ATSG). These stocks are Tompkins Financial Corporation (NYSE:TMP), PC Connection, Inc. (NASDAQ:CNXN), TG Therapeutics Inc (NASDAQ:TGTX), and Plug Power, Inc. (NASDAQ:PLUG). This group of stocks' market caps are similar to ATSG's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TMP,4,14209,-2 CNXN,10,43318,-5 TGTX,26,260243,4 PLUG,15,92142,2 Average,13.75,102478,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $102 million. That figure was $116 million in ATSG's case. TG Therapeutics Inc (NASDAQ:TGTX) is the most popular stock in this table. On the other hand Tompkins Financial Corporation (NYSE:TMP) is the least popular one with only 4 bullish hedge fund positions. Air Transport Services Group Inc. (NASDAQ:ATSG) is not the most popular stock in this group but hedge fund interest is still above average. 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 gained 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on ATSG, though not to the same extent, as the stock returned 25.4% during the first two months and ten days of the second quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.