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Do Hedge Funds Love Amerisafe, Inc. (AMSF)?

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Amerisafe, Inc. (NASDAQ:AMSF) based on those filings.

Is Amerisafe, Inc. (NASDAQ:AMSF) ready to rally soon? Prominent investors are in a pessimistic mood. The number of bullish hedge fund bets went down by 1 in recent months. Our calculations also showed that AMSF isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). AMSF was in 9 hedge funds’ portfolios at the end of the first quarter of 2020. There were 10 hedge funds in our database with AMSF holdings at the end of the previous quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

Today there are numerous gauges market participants put to use to size up stocks. Two of the most innovative gauges are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the elite investment managers can outpace the S&P 500 by a very impressive amount (see the details here).

David Harding

David Harding of Winton Capital Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, We take a look at lists like the top 15 defense contractors in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to review the fresh hedge fund action surrounding Amerisafe, Inc. (NASDAQ:AMSF).

What does smart money think about Amerisafe, Inc. (NASDAQ:AMSF)?

At the end of the first quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AMSF over the last 18 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

The largest stake in Amerisafe, Inc. (NASDAQ:AMSF) was held by Renaissance Technologies, which reported holding $19.4 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $7.1 million position. Other investors bullish on the company included Two Sigma Advisors, Fisher Asset Management, and Winton Capital Management. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Amerisafe, Inc. (NASDAQ:AMSF), around 0.05% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to AMSF.

Due to the fact that Amerisafe, Inc. (NASDAQ:AMSF) has witnessed bearish sentiment from the smart money, logic holds that there exists a select few money managers that elected to cut their positions entirely in the first quarter. It’s worth mentioning that Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors cut the biggest investment of the “upper crust” of funds followed by Insider Monkey, totaling close to $0.2 million in stock, and Donald Sussman’s Paloma Partners was right behind this move, as the fund dropped about $0.2 million worth. These moves are interesting, as total hedge fund interest dropped by 1 funds in the first quarter.

Let’s check out hedge fund activity in other stocks similar to Amerisafe, Inc. (NASDAQ:AMSF). We will take a look at Zealand Pharma A/S (NASDAQ:ZEAL), Luminex Corporation (NASDAQ:LMNX), Wolverine World Wide, Inc. (NYSE:WWW), and MakeMyTrip Limited (NASDAQ:MMYT). All of these stocks’ market caps match AMSF’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ZEAL 3 27186 -1
LMNX 15 232969 -2
WWW 22 84713 -1
MMYT 9 32911 -5
Average 12.25 94445 -2.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $94 million. That figure was $36 million in AMSF’s case. Wolverine World Wide, Inc. (NYSE:WWW) is the most popular stock in this table. On the other hand Zealand Pharma A/S (NASDAQ:ZEAL) is the least popular one with only 3 bullish hedge fund positions. Amerisafe, Inc. (NASDAQ:AMSF) is not the least popular stock in this group but hedge fund interest is still below average. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd and surpassed the market by 15.9 percentage points. Unfortunately AMSF wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); AMSF investors were disappointed as the stock returned -6.8% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 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.