After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of December 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards At Home Group Inc. (NYSE:HOME).
Is HOME stock a buy? At Home Group Inc. (NYSE:HOME) was in 31 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 34. HOME has experienced a decrease in hedge fund interest in recent months. There were 34 hedge funds in our database with HOME holdings at the end of September. Our calculations also showed that HOME isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In today’s marketplace there are many formulas stock market investors employ to assess stocks. A duo of the most useful formulas are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the top fund managers can outperform their index-focused peers by a healthy amount (see the details here).
Clifford Sosin of CAS Investment Partners
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this psychedelic-drug startup. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind let's analyze the new hedge fund action surrounding At Home Group Inc. (NYSE:HOME).
Do Hedge Funds Think HOME Is A Good Stock To Buy Now?
At Q4's end, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards HOME over the last 22 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
More specifically, CAS Investment Partners was the largest shareholder of At Home Group Inc. (NYSE:HOME), with a stake worth $161.3 million reported as of the end of December. Trailing CAS Investment Partners was North Peak Capital, which amassed a stake valued at $67.8 million. Indaba Capital Management, Brightlight Capital, and D E Shaw were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position North Peak Capital allocated the biggest weight to At Home Group Inc. (NYSE:HOME), around 12.12% of its 13F portfolio. Brightlight Capital is also relatively very bullish on the stock, earmarking 9.16 percent of its 13F equity portfolio to HOME.
Seeing as At Home Group Inc. (NYSE:HOME) has faced bearish sentiment from hedge fund managers, logic holds that there lies a certain "tier" of hedgies that elected to cut their entire stakes by the end of the fourth quarter. At the top of the heap, Dmitry Balyasny's Balyasny Asset Management said goodbye to the largest investment of all the hedgies followed by Insider Monkey, comprising about $8.2 million in stock, and Elise Di Vincenzo Crumbine's Stormborn Capital Management was right behind this move, as the fund sold off about $7 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 3 funds by the end of the fourth quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as At Home Group Inc. (NYSE:HOME) but similarly valued. These stocks are Compugen Ltd. (NASDAQ:CGEN), Hyster-Yale Materials Handling Inc (NYSE:HY), Vital Farms, Inc. (NASDAQ:VITL), Teekay LNG Partners L.P. (NYSE:TGP), Banco Macro SA (NYSE:BMA), Smith & Wesson Brands, Inc. (NASDAQ:SWBI), and Sutro Biopharma, Inc. (NASDAQ:STRO). This group of stocks' market values match HOME's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CGEN,11,237710,-3 HY,10,50692,-2 VITL,9,51614,-2 TGP,10,33626,0 BMA,7,31895,-2 SWBI,20,111276,2 STRO,34,351844,11 Average,14.4,124094,0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.4 hedge funds with bullish positions and the average amount invested in these stocks was $124 million. That figure was $476 million in HOME's case. Sutro Biopharma, Inc. (NASDAQ:STRO) is the most popular stock in this table. On the other hand Banco Macro SA (NYSE:BMA) is the least popular one with only 7 bullish hedge fund positions. At Home Group Inc. (NYSE:HOME) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HOME is 73.8. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Hedge funds were also right about betting on HOME as the stock returned 85% since the end of Q4 (through 4/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.