As we already know from media reports and hedge fund investor letters, many hedge funds lost money in fourth quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with technology among them. Nevertheless, most investors decided to stick to their bullish theses and recouped their losses by the end of the first quarter. We get to see hedge funds' thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Ameris Bancorp (NASDAQ:ABCB).
Is Ameris Bancorp (NASDAQ:ABCB) a healthy stock for your portfolio? The best stock pickers are getting less optimistic. The number of bullish hedge fund positions retreated by 1 lately. Our calculations also showed that abcb isn't among the 30 most popular stocks among hedge funds. ABCB was in 17 hedge funds' portfolios at the end of March. There were 18 hedge funds in our database with ABCB positions at the end of the previous quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_746893" align="aligncenter" width="473"] Paul Marshall of Marshall Wace[/caption]
Let's review the key hedge fund action surrounding Ameris Bancorp (NASDAQ:ABCB).
Hedge fund activity in Ameris Bancorp (NASDAQ:ABCB)
Heading into the second quarter of 2019, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the fourth quarter of 2018. By comparison, 8 hedge funds held shares or bullish call options in ABCB a year ago. With the smart money's sentiment swirling, there exists a select group of noteworthy hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
The largest stake in Ameris Bancorp (NASDAQ:ABCB) was held by Polaris Capital Management, which reported holding $37.5 million worth of stock at the end of March. It was followed by Mendon Capital Advisors with a $34.9 million position. Other investors bullish on the company included Marshall Wace LLP, Brant Point Investment Management, and Citadel Investment Group.
Since Ameris Bancorp (NASDAQ:ABCB) has faced falling interest from the smart money, we can see that there was a specific group of money managers that decided to sell off their positions entirely heading into Q3. Interestingly, Jim Simons's Renaissance Technologies dumped the largest investment of all the hedgies monitored by Insider Monkey, totaling about $4.7 million in stock, and David Costen Haley's HBK Investments was right behind this move, as the fund sold off about $0.6 million worth. These moves are interesting, as total hedge fund interest fell by 1 funds heading into Q3.
Let's check out hedge fund activity in other stocks similar to Ameris Bancorp (NASDAQ:ABCB). We will take a look at Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), Hostess Brands, Inc. (NASDAQ:TWNK), MSG Networks Inc (NYSE:MSGN), and Atrion Corporation (NASDAQ:ATRI). This group of stocks' market values are closest to ABCB's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MDRX,21,200430,3 TWNK,24,132667,4 MSGN,21,261088,1 ATRI,8,92684,-2 Average,18.5,171717,1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $172 million. That figure was $126 million in ABCB's case. Hostess Brands, Inc. (NASDAQ:TWNK) is the most popular stock in this table. On the other hand Atrion Corporation (NASDAQ:ATRI) is the least popular one with only 8 bullish hedge fund positions. Ameris Bancorp (NASDAQ:ABCB) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on ABCB as the stock returned 11.2% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.