The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 817 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, about a month before the elections. In this article we look at what those investors think of Amerisafe, Inc. (NASDAQ:AMSF).
Is AMSF a good stock to buy now? The best stock pickers were buying. The number of bullish hedge fund bets advanced by 4 recently. Amerisafe, Inc. (NASDAQ:AMSF) was in 16 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 14. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that AMSF 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).
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. Now let’s analyze the recent hedge fund action surrounding Amerisafe, Inc. (NASDAQ:AMSF).
Do Hedge Funds Think AMSF Is A Good Stock To Buy Now?
At third quarter’s end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from the second quarter of 2020. By comparison, 14 hedge funds held shares or bullish call options in AMSF a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies has the biggest position in Amerisafe, Inc. (NASDAQ:AMSF), worth close to $19.3 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, led by Ken Griffin, holding a $4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers with similar optimism contain Chuck Royce’s Royce & Associates, John Overdeck and David Siegel’s Two Sigma Advisors and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Amerisafe, Inc. (NASDAQ:AMSF), around 0.07% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, designating 0.04 percent of its 13F equity portfolio to AMSF.
As aggregate interest increased, key money managers have been driving this bullishness. ExodusPoint Capital, managed by Michael Gelband, initiated the most valuable position in Amerisafe, Inc. (NASDAQ:AMSF). ExodusPoint Capital had $0.6 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $0.5 million position during the quarter. The other funds with new positions in the stock are Noam Gottesman’s GLG Partners and Paul Tudor Jones’s Tudor Investment Corp.
Let’s now review hedge fund activity in other stocks similar to Amerisafe, Inc. (NASDAQ:AMSF). We will take a look at Upland Software Inc (NASDAQ:UPLD), Surgery Partners, Inc. (NASDAQ:SGRY), Heartland Financial USA Inc (NASDAQ:HTLF), Allegheny Technologies Incorporated (NYSE:ATI), HudBay Minerals Inc (NYSE:HBM), Independence Realty Trust Inc (NYSE:IRT), and Harsco Corporation (NYSE:HSC). This group of stocks’ market caps are closest to AMSF’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 13.6 hedge funds with bullish positions and the average amount invested in these stocks was $131 million. That figure was $39 million in AMSF’s case. Upland Software Inc (NASDAQ:UPLD) is the most popular stock in this table. On the other hand Heartland Financial USA Inc (NASDAQ:HTLF) is the least popular one with only 7 bullish hedge fund positions. Amerisafe, Inc. (NASDAQ:AMSF) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AMSF 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. 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 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 30.7% in 2020 through December 14th and beat the market again by 15.8 percentage points. Unfortunately AMSF wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on AMSF were disappointed as the stock returned 6.6% since the end of September (through 12/14) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.