A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Air Transport Services Group Inc. (NASDAQ:ATSG).
Air Transport Services Group Inc. (NASDAQ:ATSG) saw an increase in popularity among smart money investors during the third quarter. There were 18 hedge funds in our database with ATSG holdings at the end of September, compared to 16 funds at the end of June. At the end of this article we will also compare ATSG to other stocks including Universal Health Realty Income Trust (NYSE:UHT), Caretrus REIT Inc (NASDAQ:CTRE), and Amphastar Pharmaceuticals Inc (NASDAQ:AMPH) to get a better sense of its popularity.
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
Now, we’re going to review the recent action surrounding Air Transport Services Group Inc. (NASDAQ:ATSG).
What have hedge funds been doing with Air Transport Services Group Inc. (NASDAQ:ATSG)?
At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on Air Transport Services Group Inc. (NASDAQ:ATSG), which represents an increase of 13% from the end of the second quarter. Below, you can check out the change in hedge fund sentiment towards ATSG over the last five quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Willem Mesdag’s Red Mountain Capital has the largest position in Air Transport Services Group Inc. (NASDAQ:ATSG), worth close to $105.1 million, amounting to 31.8% of its total 13F portfolio. Sitting at the No. 2 spot is Phil Frohlich’s Prescott Group Capital Management, with a $59.1 million position; the fund has 12.6% of its 13F portfolio invested in the stock. Remaining peers with similar optimism comprise Michael M. Rothenberg’s Moab Capital Partners, Gregg J. Powers’ Private Capital Management, and Richard S. Meisenberg’s ACK Asset Management. We should note that Moab Capital Partners is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As industrywide interest jumped, specific money managers were breaking ground themselves. Glenn Russell Dubin’s Highbridge Capital Managemen assembled the most outsized position in Air Transport Services Group Inc. (NASDAQ:ATSG). Highbridge Capital Management had $0.3 million invested in the company at the end of the quarter. Paul Tudor Jones’ Tudor Investment Corp also made a $0.2 million investment in the stock during the quarter. The following funds were also among the new ATSG investors: Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital and Robert B. Gillam’s McKinley Capital Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Air Transport Services Group Inc. (NASDAQ:ATSG) but similarly valued. We will take a look at Universal Health Realty Income Trust (NYSE:UHT), Caretrus REIT Inc (NASDAQ:CTRE), Amphastar Pharmaceuticals Inc (NASDAQ:AMPH), and Sonic Automotive Inc (NYSE:SAH). This group of stocks’ market valuations match ATSG’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 10 funds with bullish positions and the average amount invested in these stocks was $30 million, lower than the $258 million figure in ATSG’s case. Sonic Automotive Inc (NYSE:SAH) is the most popular stock in this table. On the other hand Universal Health Realty Income Trust (NYSE:UHT) is the least popular one with only five funds holding shares. Compared to these stocks Air Transport Services Group Inc. (NASDAQ:ATSG) 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.