The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Associated Banc-Corp (NYSE:ASB).
Is Associated Banc-Corp (NYSE:ASB) a buy right now? Prominent investors are becoming more confident. The number of long hedge fund bets advanced by 3 lately. Our calculations also showed that ASB isn't among the 30 most popular stocks among hedge funds (view the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's take a gander at the key hedge fund action encompassing Associated Banc-Corp (NYSE:ASB).
How are hedge funds trading Associated Banc-Corp (NYSE:ASB)?
At Q2's end, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 19% from one quarter earlier. On the other hand, there were a total of 13 hedge funds with a bullish position in ASB a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
The largest stake in Associated Banc-Corp (NYSE:ASB) was held by Pzena Investment Management, which reported holding $45.1 million worth of stock at the end of March. It was followed by Citadel Investment Group with a $40.1 million position. Other investors bullish on the company included Balyasny Asset Management, AQR Capital Management, and Renaissance Technologies.
As one would reasonably expect, key hedge funds were breaking ground themselves. Carlson Capital, managed by Clint Carlson, initiated the most outsized position in Associated Banc-Corp (NYSE:ASB). Carlson Capital had $3.7 million invested in the company at the end of the quarter. Gregg Moskowitz's Interval Partners also made a $1.4 million investment in the stock during the quarter. The following funds were also among the new ASB investors: Matthew Tewksbury's Stevens Capital Management, David Andre and Astro Teller's Cerebellum Capital, and Claes Fornell's CSat Investment Advisory.
Let's now take a look at hedge fund activity in other stocks similar to Associated Banc-Corp (NYSE:ASB). We will take a look at National Health Investors Inc (NYSE:NHI), First Hawaiian, Inc. (NASDAQ:FHB), Companhia Paranaense de Energia - COPEL (NYSE:ELP), and KAR Auction Services Inc (NYSE:KAR). This group of stocks' market values resemble ASB's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NHI,13,134792,1 FHB,21,271430,-2 ELP,9,66595,-1 KAR,32,631830,-10 Average,18.75,276162,-3 [/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 $276 million. That figure was $204 million in ASB's case. KAR Auction Services Inc (NYSE:KAR) is the most popular stock in this table. On the other hand Companhia Paranaense de Energia - COPEL (NYSE:ELP) is the least popular one with only 9 bullish hedge fund positions. Associated Banc-Corp (NYSE:ASB) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately ASB wasn't nearly as popular as these 20 stocks and hedge funds that were betting on ASB were disappointed as the stock returned -3.4% during the third quarter 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.