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Where Do Hedge Funds Stand On A-Mark Precious Metals, Inc. (AMRK)?

Abigail Fisher
·6 min read

In this article you are going to find out whether hedge funds think A-Mark Precious Metals, Inc. (NASDAQ:AMRK) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

A-Mark Precious Metals, Inc. (NASDAQ:AMRK) was in 4 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 5. AMRK investors should be aware of an increase in support from the world's most elite money managers lately. There were 2 hedge funds in our database with AMRK holdings at the end of June. Our calculations also showed that AMRK 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). Video: Watch our video about the top 5 most popular hedge fund stocks.

Today there are plenty of formulas stock market investors can use to size up publicly traded companies. A pair of the most underrated formulas are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can outperform the market by a solid amount (see the details here).

Carlo Cannell
Carlo Cannell

J. Carlo Cannell of Cannell Capital

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 gander at the fresh hedge fund action regarding A-Mark Precious Metals, Inc. (NASDAQ:AMRK).

What have hedge funds been doing with A-Mark Precious Metals, Inc. (NASDAQ:AMRK)?

At Q3's end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from one quarter earlier. On the other hand, there were a total of 3 hedge funds with a bullish position in AMRK a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the biggest position in A-Mark Precious Metals, Inc. (NASDAQ:AMRK). Renaissance Technologies has a $4.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies's heels is J. Carlo Cannell of Cannell Capital, with a $1.4 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism encompass Paul Marshall and Ian Wace's Marshall Wace LLP, Israel Englander's Millennium Management and . In terms of the portfolio weights assigned to each position Cannell Capital allocated the biggest weight to A-Mark Precious Metals, Inc. (NASDAQ:AMRK), around 0.51% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.0046 percent of its 13F equity portfolio to AMRK.

As aggregate interest increased, some big names were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the biggest position in A-Mark Precious Metals, Inc. (NASDAQ:AMRK). Marshall Wace LLP had $0.6 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $0.4 million position during the quarter.

Let's go over hedge fund activity in other stocks similar to A-Mark Precious Metals, Inc. (NASDAQ:AMRK). We will take a look at Akumin Inc. (NASDAQ:AKU), Unifi, Inc. (NYSE:UFI), Equity Bancshares, Inc. (NASDAQ:EQBK), Reliant Bancorp, Inc. (NASDAQ:RBNC), Neptune Wellness Solutions Inc (NASDAQ:NEPT), Xunlei Ltd (NASDAQ:XNET), and DermTech, Inc. (NASDAQ:DMTK). All of these stocks' market caps resemble AMRK's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AKU,3,47643,3 UFI,12,37612,-4 EQBK,6,12966,-2 RBNC,3,5493,1 NEPT,5,41890,3 XNET,5,5302,0 DMTK,6,37635,-1 Average,5.7,26934,0 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.7 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $7 million in AMRK's case. Unifi, Inc. (NYSE:UFI) is the most popular stock in this table. On the other hand Akumin Inc. (NASDAQ:AKU) is the least popular one with only 3 bullish hedge fund positions. A-Mark Precious Metals, Inc. (NASDAQ:AMRK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AMRK is 36.6. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 gained 30.7% in 2020 through November 27th and surpassed the market again by 16.1 percentage points. Unfortunately AMRK wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); AMRK investors were disappointed as the stock returned -5.1% since the end of September (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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Disclosure: None. This article was originally published at Insider Monkey.

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