At Home Group Inc. (HOME) Fell Out Of Favor With Hedge Funds

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about At Home Group Inc. (NYSE:HOME) in this article.

Is At Home Group Inc. (NYSE:HOME) ready to rally soon? The smart money was getting less bullish. The number of bullish hedge fund positions were trimmed by 1 in recent months. At Home Group Inc. (NYSE:HOME) was in 30 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 34. Our calculations also showed that HOME isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Today there are dozens of methods shareholders have at their disposal to size up stocks. A couple of the most under-the-radar methods are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the top hedge fund managers can beat their index-focused peers by a superb amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

David E. Shaw of D.E. Shaw

David E. Shaw of D.E. Shaw

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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. With all of this in mind let’s check out the new hedge fund action regarding At Home Group Inc. (NYSE:HOME).

Do Hedge Funds Think HOME Is A Good Stock To Buy Now?

At Q1’s end, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards HOME over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is HOME A Good Stock To Buy?

More specifically, CAS Investment Partners was the largest shareholder of At Home Group Inc. (NYSE:HOME), with a stake worth $318 million reported as of the end of March. Trailing CAS Investment Partners was North Peak Capital, which amassed a stake valued at $120.5 million. Renaissance Technologies, D E Shaw, and Two Sigma Advisors 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 26.67% of its 13F portfolio. CAS Investment Partners is also relatively very bullish on the stock, designating 16.25 percent of its 13F equity portfolio to HOME.

Since At Home Group Inc. (NYSE:HOME) has witnessed falling interest from hedge fund managers, we can see that there is a sect of hedgies who were dropping their entire stakes last quarter. Interestingly, Angela Aldrich’s Bayberry Capital Partners dropped the largest investment of the “upper crust” of funds monitored by Insider Monkey, comprising close to $18.4 million in stock. Marc Majzner’s fund, Clearline Capital, also said goodbye to its stock, about $10.2 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 1 funds last quarter.

Let’s check out hedge fund activity in other stocks similar to At Home Group Inc. (NYSE:HOME). These stocks are Cal-Maine Foods Inc (NASDAQ:CALM), Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL), ADC Therapeutics SA (NYSE:ADCT), NuStar Energy L.P. (NYSE:NS), Kura Oncology, Inc. (NASDAQ:KURA), Vista Outdoor Inc (NYSE:VSTO), and Washington Real Estate Investment Trust (NYSE:WRE). This group of stocks’ market values match HOME’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CALM 20 224111 -1
MDGL 17 494379 2
ADCT 8 233473 -4
NS 4 17919 0
KURA 32 591074 -11
VSTO 22 344887 -1
WRE 10 64215 -1
Average 16.1 281437 -2.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.1 hedge funds with bullish positions and the average amount invested in these stocks was $281 million. That figure was $807 million in HOME’s case. Kura Oncology, Inc. (NASDAQ:KURA) is the most popular stock in this table. On the other hand NuStar Energy L.P. (NYSE:NS) is the least popular one with only 4 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 76.9. 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 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 22.8% in 2021 through July 2nd and still beat the market by 6 percentage points. Hedge funds were also right about betting on HOME as the stock returned 28.3% since the end of Q1 (through 7/2) 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.