Is AMC Entertainment Holdings Inc (NYSE:AMC) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
AMC Entertainment Holdings Inc (NYSE:AMC) investors should pay attention to an increase in hedge fund interest recently. AMC Entertainment Holdings Inc (NYSE:AMC) was in 19 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 31. There were 16 hedge funds in our database with AMC holdings at the end of December. Our calculations also showed that AMC isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 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 115 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 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.
Daniel Och, Founder of OZ Management
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Do Hedge Funds Think AMC Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 19% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards AMC over the last 23 quarters. With hedge funds' capital changing hands, there exists a select group of noteworthy hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Ken Griffin's Citadel Investment Group has the largest call position in AMC Entertainment Holdings Inc (NYSE:AMC), worth close to $42 million, comprising less than 0.1%% of its total 13F portfolio. Coming in second is 683 Capital Partners, managed by Ari Zweiman, which holds a $29 million call position; the fund has 1.5% of its 13F portfolio invested in the stock. Other peers that hold long positions encompass D. E. Shaw's D E Shaw, Ken Griffin's Citadel Investment Group and Daniel S. Och's OZ Management. In terms of the portfolio weights assigned to each position 683 Capital Partners allocated the biggest weight to AMC Entertainment Holdings Inc (NYSE:AMC), around 1.53% of its 13F portfolio. Arbiter Partners Capital Management is also relatively very bullish on the stock, dishing out 0.26 percent of its 13F equity portfolio to AMC.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. 683 Capital Partners, managed by Ari Zweiman, established the largest call position in AMC Entertainment Holdings Inc (NYSE:AMC). 683 Capital Partners had $29 million invested in the company at the end of the quarter. Renaissance Technologies also made a $5.3 million investment in the stock during the quarter. The other funds with brand new AMC positions are Paul J. Isaac's Arbiter Partners Capital Management, Paul Marshall and Ian Wace's Marshall Wace LLP, and Cliff Asness's AQR Capital Management.
Let's now review hedge fund activity in other stocks similar to AMC Entertainment Holdings Inc (NYSE:AMC). These stocks are Acadia Healthcare Company Inc (NASDAQ:ACHC), Atea Pharmaceuticals, Inc. (NASDAQ:AVIR), Vontier Corporation (NYSE:VNT), Park Hotels & Resorts Inc. (NYSE:PK), CIT Group Inc. (NYSE:CIT), Galapagos NV (NASDAQ:GLPG), and Avis Budget Group Inc. (NASDAQ:CAR). This group of stocks' market caps are closest to AMC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ACHC,30,525135,1 AVIR,13,1296595,-1 VNT,38,786836,2 PK,18,101472,5 CIT,28,802021,-3 GLPG,20,167561,8 CAR,21,1724243,-7 Average,24,771980,0.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $772 million. That figure was $34 million in AMC's case. Vontier Corporation (NYSE:VNT) is the most popular stock in this table. On the other hand Atea Pharmaceuticals, Inc. (NASDAQ:AVIR) is the least popular one with only 13 bullish hedge fund positions. AMC Entertainment Holdings Inc (NYSE:AMC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AMC is 38.4. 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. 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 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. A small number of hedge funds were also right about betting on AMC as the stock returned 242.4% since the end of the first quarter (through 7/16) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.