Is Air Transport Services Group Inc. (ATSG) A Good Stock To Buy?

At Insider Monkey we follow around 730 of the best-performing investors and even though many of them lost money in the last several months, the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.

Is Air Transport Services Group Inc. (NASDAQ:ATSG) worth your attention right now? The best stock pickers are getting less optimistic. The number of long hedge fund positions fell by 3 recently. ATSG was in 19 hedge funds’ portfolios at the end of September. There were 22 hedge funds in our database with ATSG holdings at the end of the previous quarter. 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 Sapiens International Corporation N.V. (NASDAQ:SPNS), Bryn Mawr Bank Corp. (NASDAQ:BMTC), and MYR Group Inc (NASDAQ:MYRG) to gather more data points.

Follow Air Transport Services Group Inc. (NASDAQ:ATSG)

To the average investor there are a large number of metrics market participants can use to appraise publicly traded companies. A duo of the most useful metrics are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the best fund managers can outclass their index-focused peers by a superb amount (see the details here).

With all of this in mind, let’s take a glance at the fresh action encompassing Air Transport Services Group Inc. (NASDAQ:ATSG).

How are hedge funds trading Air Transport Services Group Inc. (NASDAQ:ATSG)?

Heading into Q4, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from the second quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Willem Mesdag’s Red Mountain Capital has the most valuable position in Air Transport Services Group Inc. (NASDAQ:ATSG), worth close to $95.4 million, accounting for 25.2% of its total 13F portfolio. The second largest stake is held by Phil Frohlich of Prescott Group Capital Management, with an $42.2 million position; 10.2% of its 13F portfolio is allocated to the stock. Other peers that are bullish comprise Michael M. Rothenberg’s Moab Capital Partners, Gregg J. Powers’s Private Capital Management and Jerome L. Simon’s Lonestar Capital Management.

Judging by the fact that Air Transport Services Group Inc. (NASDAQ:ATSG) has faced a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few funds that decided to sell off their positions entirely by the end of the third quarter. It’s worth mentioning that Marc Lehmann’s Riverloft Capital Management sold off the largest investment of the “upper crust” of funds tracked by Insider Monkey, comprising close to $1 million in stock. Andy Redleaf’s fund, Whitebox Advisors, also sold off its stock, about $0.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Air Transport Services Group Inc. (NASDAQ:ATSG). These stocks are Sapiens International Corporation N.V. (NASDAQ:SPNS), Bryn Mawr Bank Corp. (NASDAQ:BMTC), MYR Group Inc (NASDAQ:MYRG), and Triangle Capital Corporation (NYSE:TCAP). This group of stocks’ market valuations resemble ATSG’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SPNS 10 27572 4
BMTC 8 32216 -1
MYRG 14 79816 -2
TCAP 6 7140 1

As you can see these stocks had an average of 9.5 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $197 million in ATSG’s case. MYR Group Inc (NASDAQ:MYRG) is the most popular stock in this table. On the other hand Triangle Capital Corporation (NYSE:TCAP) is the least popular one with only 6 bullish hedge fund positions. 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.