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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Ashford Inc. (NYSE:AINC).
Hedge fund interest in Ashford Inc. (NYSE:AINC) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that AINC isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare AINC to other stocks including SCWorx Corp. (NASDAQ:WORX), Live Ventures Incorporated (NASDAQ:LIVE), and Emerson Radio Corp (NYSE:MSN) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you'd ask most shareholders, hedge funds are seen as slow, outdated investment vehicles of yesteryear. While there are over 8000 funds trading today, Our researchers hone in on the leaders of this club, approximately 850 funds. Most estimates calculate that this group of people handle the majority of the smart money's total asset base, and by monitoring their unrivaled stock picks, Insider Monkey has revealed many investment strategies that have historically outrun the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Chuck Royce of Royce & Associates
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 we're going to take a glance at the fresh hedge fund action encompassing Ashford Inc. (NYSE:AINC).
What does smart money think about Ashford Inc. (NYSE:AINC)?
At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the second quarter of 2020. By comparison, 3 hedge funds held shares or bullish call options in AINC a year ago. With the smart money's sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the largest position in Ashford Inc. (NYSE:AINC). Renaissance Technologies has a $0.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Proxima Capital Management, led by Youlia Miteva, holding a $0.1 million position; the fund has 0.3% of its 13F portfolio invested in the stock. In terms of the portfolio weights assigned to each position Proxima Capital Management allocated the biggest weight to Ashford Inc. (NYSE:AINC), around 0.3% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, dishing out 0.0006 percent of its 13F equity portfolio to AINC.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the third quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's now review hedge fund activity in other stocks similar to Ashford Inc. (NYSE:AINC). These stocks are SCWorx Corp. (NASDAQ:WORX), Live Ventures Incorporated (NASDAQ:LIVE), Emerson Radio Corp (NYSE:MSN), Jaguar Health, Inc. (NASDAQ:JAGX), The Dixie Group Inc (NASDAQ:DXYN), Evolving Systems Inc (NASDAQ:EVOL), and Kaspien Holdings Inc. (NASDAQ:KSPN). This group of stocks' market valuations resemble AINC's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WORX,1,25,-1 LIVE,1,311,0 MSN,1,639,-1 JAGX,1,111,-2 DXYN,2,1212,-1 EVOL,1,903,0 KSPN,1,839,0 Average,1.1,577,-0.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 1.1 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $0 million in AINC's case. The Dixie Group Inc (NASDAQ:DXYN) is the most popular stock in this table. On the other hand SCWorx Corp. (NASDAQ:WORX) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Ashford Inc. (NYSE:AINC) is more popular among hedge funds. Our overall hedge fund sentiment score for AINC is 73. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 28.1% in 2020 through November 23rd but still managed to beat the market by 15.4 percentage points. Hedge funds were also right about betting on AINC as the stock returned 12.1% since the end of September (through 11/23) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.