Is Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably but historically their consensus stock picks outperformed the market after adjusting for known risk factors.
Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) investors should be aware of an increase in hedge fund sentiment recently. Our calculations also showed that aaww isn't among the 30 most popular stocks among hedge funds.
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 32 percentage points since May 2014 through March 12, 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.
We're going to analyze the recent hedge fund action surrounding Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW).
Hedge fund activity in Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW)
At Q4's end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 27% from the previous quarter. By comparison, 17 hedge funds held shares or bullish call options in AAWW a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Fisher Asset Management was the largest shareholder of Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), with a stake worth $25.2 million reported as of the end of December. Trailing Fisher Asset Management was Daruma Asset Management, which amassed a stake valued at $22.6 million. Royce & Associates, Millennium Management, and Lonestar Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Now, key hedge funds were breaking ground themselves. Millennium Management, managed by Israel Englander, assembled the biggest position in Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW). Millennium Management had $13 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $8.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Michael Hintze's CQS Cayman LP, Phill Gross and Robert Atchinson's Adage Capital Management, and Mark Lee's Forest Hill Capital.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) but similarly valued. We will take a look at BJ's Restaurants, Inc. (NASDAQ:BJRI), Wageworks Inc (NYSE:WAGE), FB Financial Corporation (NYSE:FBK), and Dril-Quip, Inc. (NYSE:DRQ). This group of stocks' market caps are closest to AAWW's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BJRI,21,145000,1 WAGE,13,83887,1 FBK,8,115538,-2 DRQ,19,127024,1 Average,15.25,117862,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $118 million. That figure was $121 million in AAWW's case. BJ's Restaurants, Inc. (NASDAQ:BJRI) is the most popular stock in this table. On the other hand FB Financial Corporation (NYSE:FBK) is the least popular one with only 8 bullish hedge fund positions. Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately AAWW wasn't nearly as popular as these 15 stock and hedge funds that were betting on AAWW were disappointed as the stock returned 16.3% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.