Hedge Funds Are Dumping The Andersons, Inc. (ANDE)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of The Andersons, Inc. (NASDAQ:ANDE).

The Andersons, Inc. (NASDAQ:ANDE) has experienced a decrease in enthusiasm from smart money of late. Our calculations also showed that ANDE 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).

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

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Fred DiSanto Ancora Advisors

Fred DiSanto of Ancora Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a gander at the latest hedge fund action surrounding The Andersons, Inc. (NASDAQ:ANDE).

How are hedge funds trading The Andersons, Inc. (NASDAQ:ANDE)?

At the end of the first quarter, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -54% from the previous quarter. By comparison, 8 hedge funds held shares or bullish call options in ANDE a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Rutabaga Capital Management held the most valuable stake in The Andersons, Inc. (NASDAQ:ANDE), which was worth $5.4 million at the end of the third quarter. On the second spot was Millennium Management which amassed $2.5 million worth of shares. Citadel Investment Group, D E Shaw, and Bailard Inc 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 Rutabaga Capital Management allocated the biggest weight to The Andersons, Inc. (NASDAQ:ANDE), around 3.24% of its 13F portfolio. Bailard Inc is also relatively very bullish on the stock, dishing out 0.02 percent of its 13F equity portfolio to ANDE.

Seeing as The Andersons, Inc. (NASDAQ:ANDE) has faced a decline in interest from hedge fund managers, logic holds that there was a specific group of fund managers who sold off their positions entirely by the end of the first quarter. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the biggest investment of the 750 funds monitored by Insider Monkey, valued at about $6.7 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also said goodbye to its stock, about $4.9 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 7 funds by the end of the first quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as The Andersons, Inc. (NASDAQ:ANDE) but similarly valued. These stocks are Retrophin Inc (NASDAQ:RTRX), Aerie Pharmaceuticals Inc (NASDAQ:AERI), AAR Corp. (NYSE:AIR), and Bloomin’ Brands Inc (NASDAQ:BLMN). This group of stocks’ market caps are closest to ANDE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RTRX 22 257866 0
AERI 24 158071 3
AIR 18 42644 -5
BLMN 24 88391 6
Average 22 136743 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $137 million. That figure was $10 million in ANDE’s case. Aerie Pharmaceuticals Inc (NASDAQ:AERI) is the most popular stock in this table. On the other hand AAR Corp. (NYSE:AIR) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks The Andersons, Inc. (NASDAQ:ANDE) is even less popular than AIR. Hedge funds dodged a bullet by taking a bearish stance towards ANDE. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but managed to beat the market by 14.2 percentage points. Unfortunately ANDE wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); ANDE investors were disappointed as the stock returned -20.2% during the second quarter (through June 10th) 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 so far in 2020.

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