Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI).
Is ACBI a good stock to buy now? Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 14 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that ACBI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Tecnoglass Inc. (NASDAQ:TGLS), Cross Country Healthcare, Inc. (NASDAQ:CCRN), and The Joint Corp. (NASDAQ:JYNT) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind let’s check out the key hedge fund action encompassing Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI).
Do Hedge Funds Think ACBI Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards ACBI over the last 21 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Michael Price’s MFP Investors has the biggest position in Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI), worth close to $10.8 million, amounting to 2% of its total 13F portfolio. Coming in second is Renaissance Technologies, which holds a $7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism comprise Fred Cummings’s Elizabeth Park Capital Management, D. E. Shaw’s D E Shaw and Mario Gabelli’s GAMCO Investors. In terms of the portfolio weights assigned to each position Elizabeth Park Capital Management allocated the biggest weight to Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI), around 3.6% of its 13F portfolio. MFP Investors is also relatively very bullish on the stock, dishing out 1.96 percent of its 13F equity portfolio to ACBI.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Engineers Gate Manager. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Fourthstone LLC).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) but similarly valued. We will take a look at Tecnoglass Inc. (NASDAQ:TGLS), Cross Country Healthcare, Inc. (NASDAQ:CCRN), The Joint Corp. (NASDAQ:JYNT), Global Water Resources, Inc. (NASDAQ:GWRS), Calithera Biosciences Inc (NASDAQ:CALA), Fiesta Restaurant Group Inc (NASDAQ:FRGI), and Evelo Biosciences, Inc. (NASDAQ:EVLO). This group of stocks’ market caps are similar to ACBI’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $36 million in ACBI’s case. The Joint Corp. (NASDAQ:JYNT) is the most popular stock in this table. On the other hand Tecnoglass Inc. (NASDAQ:TGLS) is the least popular one with only 3 bullish hedge fund positions. Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ACBI is 69. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on ACBI as the stock returned 36.6% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.