Reputable billionaire investors such as Jim Simons, Cliff Asness and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Ameris Bancorp (NASDAQ:ABCB) has experienced a decrease in activity from the world’s largest hedge funds of late. ABCB was in 16 hedge funds’ portfolios at the end of June. There were 17 hedge funds in our database with ABCB positions at the end of the previous quarter. Our calculations also showed that ABCB isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Today there are a multitude of metrics market participants can use to analyze stocks. A couple of the less known metrics are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the elite fund managers can outpace the broader indices by a healthy margin (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a look at the new hedge fund action encompassing Ameris Bancorp (NASDAQ:ABCB).
Hedge fund activity in Ameris Bancorp (NASDAQ:ABCB)
Heading into the third quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the previous quarter. On the other hand, there were a total of 10 hedge funds with a bullish position in ABCB a year ago. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
More specifically, Polaris Capital Management was the largest shareholder of Ameris Bancorp (NASDAQ:ABCB), with a stake worth $42.8 million reported as of the end of March. Trailing Polaris Capital Management was Mendon Capital Advisors, which amassed a stake valued at $29.8 million. Brant Point Investment Management, Citadel Investment Group, and Forest Hill Capital were also very fond of the stock, giving the stock large weights in their portfolios.
Seeing as Ameris Bancorp (NASDAQ:ABCB) has faced falling interest from the smart money, logic holds that there lies a certain “tier” of funds that elected to cut their positions entirely heading into Q3. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management said goodbye to the biggest investment of all the hedgies monitored by Insider Monkey, comprising close to $5.4 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund sold off about $1.1 million worth. These transactions are important to note, as total hedge fund interest fell by 1 funds heading into Q3.
Let’s now take a look at hedge fund activity in other stocks similar to Ameris Bancorp (NASDAQ:ABCB). We will take a look at Bottomline Technologies (de), Inc. (NASDAQ:EPAY), First Merchants Corporation (NASDAQ:FRME), NGL Energy Partners LP (NYSE:NGL), and The Bank of N.T. Butterfield & Son Limited (NYSE:NTB). All of these stocks’ market caps are similar to ABCB’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 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $82 million. That figure was $123 million in ABCB’s case. Bottomline Technologies (de), Inc. (NASDAQ:EPAY) is the most popular stock in this table. On the other hand NGL Energy Partners LP (NYSE:NGL) is the least popular one with only 4 bullish hedge fund positions. Ameris Bancorp (NASDAQ:ABCB) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on ABCB, though not to the same extent, as the stock returned 3.1% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.