Is Atlanticus Holdings Corp (NASDAQ:ATLC) a safe investment today? The smart money is in a bearish mood. The number of bullish hedge fund positions stayed the same which is a slightly negative development in our experience
If you'd ask most market participants, hedge funds are perceived as unimportant, old investment tools of years past. While there are over 8000 funds with their doors open today, we at Insider Monkey look at the leaders of this club, around 450 funds. It is widely believed that this group oversees the lion's share of all hedge funds' total asset base, and by watching their top stock picks, we have identified a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we've started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as beneficial, optimistic insider trading activity is another way to break down the stock market universe. There are a number of incentives for a bullish insider to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this strategy if you know where to look (learn more here).
Keeping this in mind, let's take a peek at the recent action regarding Atlanticus Holdings Corp (NASDAQ:ATLC).
In preparation for this quarter, a total of 6 of the hedge funds we track held long positions in this stock, a change of 0% from the first quarter. With hedgies' sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes significantly.
When looking at the hedgies we track, Ken Griffin's Citadel Investment Group had the most valuable position in Atlanticus Holdings Corp (NASDAQ:ATLC), worth close to $1.8 million, accounting for less than 0.1%% of its total 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which held a $0.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism include Noam Gottesman's GLG Partners, D. E. Shaw's D E Shaw and Whitney Tilson's T2 Partners.
Insider purchases made by high-level executives is most useful when the company we're looking at has seen transactions within the past 180 days. Over the latest half-year time frame, Atlanticus Holdings Corp (NASDAQ:ATLC) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
With the returns demonstrated by our research, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Atlanticus Holdings Corp (NASDAQ:ATLC) applies perfectly to this mantra.