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Hedge Funds Are Nibbling On A. H. Belo Corporation (AHC)

In this article you are going to find out whether hedge funds think A. H. Belo Corporation (NYSE:AHC) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

A. H. Belo Corporation (NYSE:AHC) was in 5 hedge funds’ portfolios at the end of March. AHC has seen an increase in enthusiasm from smart money of late. There were 4 hedge funds in our database with AHC holdings at the end of the previous quarter. Our calculations also showed that AHC 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.

If you’d ask most investors, hedge funds are viewed as underperforming, old investment tools of the past. While there are more than 8000 funds trading at the moment, Our experts hone in on the aristocrats of this group, around 850 funds. It is estimated that this group of investors watch over the lion’s share of the hedge fund industry’s total asset base, and by tracking their finest stock picks, Insider Monkey has determined numerous investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Mario Gabelli of GAMCO Investors

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 we’re going to go over the recent hedge fund action regarding A. H. Belo Corporation (NYSE:AHC).

What have hedge funds been doing with A. H. Belo Corporation (NYSE:AHC)?

At the end of the first quarter, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards AHC over the last 18 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

Among these funds, Renaissance Technologies held the most valuable stake in A. H. Belo Corporation (NYSE:AHC), which was worth $1.7 million at the end of the third quarter. On the second spot was Minerva Advisors which amassed $1.6 million worth of shares. GAMCO Investors, Factorial Partners, and Schonfeld Strategic 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 Minerva Advisors allocated the biggest weight to A. H. Belo Corporation (NYSE:AHC), around 1.24% of its 13F portfolio. Factorial Partners is also relatively very bullish on the stock, earmarking 0.19 percent of its 13F equity portfolio to AHC.

As one would reasonably expect, specific money managers have jumped into A. H. Belo Corporation (NYSE:AHC) headfirst. Schonfeld Strategic Advisors, managed by Ryan Tolkin (CIO), initiated the biggest position in A. H. Belo Corporation (NYSE:AHC). Schonfeld Strategic Advisors had $0 million invested in the company at the end of the quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as A. H. Belo Corporation (NYSE:AHC) but similarly valued. We will take a look at Red Lion Hotels Corporation (NYSE:RLH), Bioanalytical Systems, Inc. (NASDAQ:BASI), Village Bank and Trust Financial Corp. (NASDAQ:VBFC), and Positive Physicians Holdings, Inc. (NASDAQ:PPHI). This group of stocks’ market values match AHC’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RLH 12 14482 0
BASI 1 1571 0
VBFC 2 836 1
PPHI 1 10 0
Average 4 4225 0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $4 million in AHC’s case. Red Lion Hotels Corporation (NYSE:RLH) is the most popular stock in this table. On the other hand Bioanalytical Systems, Inc. (NASDAQ:BASI) is the least popular one with only 1 bullish hedge fund positions. A. H. Belo Corporation (NYSE:AHC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but 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 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. Unfortunately AHC wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on AHC were disappointed as the stock returned -5.7% during the same time period 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 many of these stocks already outperformed the market so far this year.

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