Do Hedge Funds Love Ameresco Inc (AMRC)?

“Market conditions are changing. The continued rise in interest rates suggests we are in the early stages of a bond bear market, which could intensify as central banks withdraw liquidity. The receding tide of liquidity will start to reveal more rocks beyond what has been exposed in emerging markets so far, and the value of a value discipline will be in avoiding the biggest capital-destroying rocks. If a rock emerges on the crowded shore of U.S. momentum, it could result in a major liquidity challenge, as momentum is often most intense on the downside as a crowded trade reverses. So investors are facing a large potential trade-off right now: continue to bet on the current dominance of momentum and the S&P 500, or bet on change and take an active value bet in names with attractive value and optionality, but with negative momentum,” said Clearbridge Investments in its market commentary. We aren’t sure whether long-term interest rates will top 5% and value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Ameresco Inc (NYSE:AMRC).

Ameresco Inc (NYSE:AMRC) investors should pay attention to an increase in support from the world’s most elite money managers of late. AMRC was in 10 hedge funds’ portfolios at the end of the third quarter of 2018. There were 9 hedge funds in our database with AMRC positions at the end of the previous quarter. Our calculations also showed that AMRC isn’t among the 30 most popular stocks among hedge funds.

To most market participants, hedge funds are assumed to be underperforming, outdated financial vehicles of the past. While there are more than 8,000 funds trading today, Our experts look at the elite of this group, approximately 700 funds. Most estimates calculate that this group of people direct the majority of the smart money’s total capital, and by following their top investments, Insider Monkey has deciphered numerous investment strategies that have historically outrun Mr. Market. Insider Monkey’s flagship hedge fund strategy outrun the S&P 500 index by 6 percentage points annually since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.

John Overdeck of Two Sigma

We’re going to analyze the fresh hedge fund action encompassing Ameresco Inc (NYSE:AMRC).

How have hedgies been trading Ameresco Inc (NYSE:AMRC)?

Heading into the fourth quarter of 2018, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in AMRC over the last 13 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.


More specifically, Royce & Associates was the largest shareholder of Ameresco Inc (NYSE:AMRC), with a stake worth $7.9 million reported as of the end of September. Trailing Royce & Associates was Bandera Partners, which amassed a stake valued at $5.5 million. Renaissance Technologies, Two Sigma Advisors, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.

With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Millennium Management, managed by Israel Englander, assembled the biggest position in Ameresco Inc (NYSE:AMRC). Millennium Management had $0.2 million invested in the company at the end of the quarter.

Let’s check out hedge fund activity in other stocks similar to Ameresco Inc (NYSE:AMRC). We will take a look at Guggenheim Strategic Opportunities Fund (NYSE:GOF), FRP Holdings Inc (NASDAQ:FRPH), TransMontaigne Partners L.P. (NYSE:TLP), and Cornerstone Strategic Value Fund, Inc. (NYSE:CLM). This group of stocks’ market values are closest to AMRC’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GOF 1 378 0
FRPH 7 61896 0
TLP 1 342 1
CLM 5 16029 5
Average 3.5 19661 1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 3.5 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $21 million in AMRC’s case. FRP Holdings Inc (NASDAQ:FRPH) is the most popular stock in this table. On the other hand Guggenheim Strategic Opportunities Fund (NYSE:GOF) and TransMontaigne Partners L.P. (NYSE:TLP) are the least popular ones with only 1 bullish hedge fund positions each. Compared to these stocks Ameresco Inc (NYSE:AMRC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

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