Is Asset Acceptance Capital Corp. (NASDAQ:AACC) an outstanding stock to buy now? Investors who are in the know are getting more bullish. The number of long hedge fund positions improved by 3 in recent months.
In the eyes of most investors, hedge funds are perceived as unimportant, outdated financial tools of the past. While there are greater than 8000 funds in operation at present, we hone in on the leaders of this club, close to 450 funds. Most estimates calculate that this group has its hands on most of the hedge fund industry’s total capital, and by monitoring their best picks, we have identified a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as integral, optimistic insider trading activity is another way to parse down the world of equities. Obviously, there are lots of stimuli for an insider to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this tactic if “monkeys” understand where to look (learn more here).
Consequently, let’s take a peek at the latest action surrounding Asset Acceptance Capital Corp. (NASDAQ:AACC).
How are hedge funds trading Asset Acceptance Capital Corp. (NASDAQ:AACC)?
At the end of the first quarter, a total of 8 of the hedge funds we track were bullish in this stock, a change of 60% from the previous quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were upping their stakes significantly.
Of the funds we track, Nierenberg Investment Management, managed by David Nierenberg, holds the most valuable position in Asset Acceptance Capital Corp. (NASDAQ:AACC). Nierenberg Investment Management has a $34.5 million position in the stock, comprising 19% of its 13F portfolio. Sitting at the No. 2 spot is Israel Englander of Millennium Management, with a $7.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that hold long positions include Cliff Asness’s AQR Capital Management, Jean-Marie Eveillard’s First Eagle Investment Management and Jim Simons’s Renaissance Technologies.
As aggregate interest increased, specific money managers have been driving this bullishness. AQR Capital Management, managed by Cliff Asness, created the most valuable position in Asset Acceptance Capital Corp. (NASDAQ:AACC). AQR Capital Management had 4.7 million invested in the company at the end of the quarter. Jean-Marie Eveillard’s First Eagle Investment Management also made a $2.7 million investment in the stock during the quarter. The other funds with brand new AACC positions are D. E. Shaw’s D E Shaw and Paul Touradji’s TOURADJI CAPITAL MANAGEMENT, LP.
How are insiders trading Asset Acceptance Capital Corp. (NASDAQ:AACC)?
Insider purchases made by high-level executives is particularly usable when the company in question has seen transactions within the past 180 days. Over the last six-month time frame, Asset Acceptance Capital Corp. (NASDAQ:AACC) has seen zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Asset Acceptance Capital Corp. (NASDAQ:AACC). These stocks are Federal Agricultural Mortgage Corp. (NYSE:AGM), Medallion Financial Corp (NASDAQ:TAXI), Regional Management Corp (NYSE:RM), Nicholas Financial, Inc. (NASDAQ:NICK), and Consumer Portfolio Services, Inc. (NASDAQ:CPSS). This group of stocks are the members of the credit services industry and their market caps resemble AACC’s market cap.