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Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Amerant Bancorp Inc. (NASDAQ:AMTB).
Is Amerant Bancorp Inc. (NASDAQ:AMTB) a superb stock to buy now? Hedge funds were becoming more confident. The number of bullish hedge fund positions inched up by 3 lately. Amerant Bancorp Inc. (NASDAQ:AMTB) was in 6 hedge funds' portfolios at the end of March. The all time high for this statistic was previously 4. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that AMTB 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. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Michael Price of MFP Investors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we're going to take a peek at the latest hedge fund action surrounding Amerant Bancorp Inc. (NASDAQ:AMTB).
Do Hedge Funds Think AMTB Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from the fourth quarter of 2020. By comparison, 2 hedge funds held shares or bullish call options in AMTB a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
More specifically, MFP Investors was the largest shareholder of Amerant Bancorp Inc. (NASDAQ:AMTB), with a stake worth $5.2 million reported as of the end of March. Trailing MFP Investors was Millennium Management, which amassed a stake valued at $4.9 million. JCSD Capital, MFP Investors, and Arrowstreet Capital 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 JCSD Capital allocated the biggest weight to Amerant Bancorp Inc. (NASDAQ:AMTB), around 2.95% of its 13F portfolio. MFP Investors is also relatively very bullish on the stock, setting aside 0.63 percent of its 13F equity portfolio to AMTB.
Now, some big names have jumped into Amerant Bancorp Inc. (NASDAQ:AMTB) headfirst. JCSD Capital, managed by Joseph P. Colmery and Steven J. Didion, initiated the biggest position in Amerant Bancorp Inc. (NASDAQ:AMTB). JCSD Capital had $3.1 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital also initiated a $1.2 million position during the quarter. The following funds were also among the new AMTB investors: Ken Griffin's Citadel Investment Group and Ken Griffin's Citadel Investment Group.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Amerant Bancorp Inc. (NASDAQ:AMTB) but similarly valued. We will take a look at Timkensteel Corp (NYSE:TMST), Juniper Industrial Holdings, Inc. (NYSE:JIH), Cutera, Inc. (NASDAQ:CUTR), Clarus Corporation (NASDAQ:CLAR), Zynex, Inc. (NASDAQ:ZYXI), Aptose Biosciences Inc (NASDAQ:APTO), and Electrameccanica Vehicles Corp. (NASDAQ:SOLO). All of these stocks' market caps are similar to AMTB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TMST,17,65291,7 JIH,27,173382,1 CUTR,16,158506,0 CLAR,15,71372,-2 ZYXI,6,8088,-2 APTO,23,173336,2 SOLO,7,11880,0 Average,15.9,94551,0.9 [/table]
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As you can see these stocks had an average of 15.9 hedge funds with bullish positions and the average amount invested in these stocks was $95 million. That figure was $21 million in AMTB's case. Juniper Industrial Holdings, Inc. (NYSE:JIH) is the most popular stock in this table. On the other hand Zynex, Inc. (NASDAQ:ZYXI) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Amerant Bancorp Inc. (NASDAQ:AMTB) is even less popular than ZYXI. Our overall hedge fund sentiment score for AMTB is 38. 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. Hedge funds clearly dropped the ball on AMTB as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. A small number of hedge funds were also right about betting on AMTB as the stock returned 18.5% since Q1 (through June 25th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.