Is Atlantic Union Bankshares Corporation (AUB) Going to Burn These Hedge Funds?

We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).

In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. 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 December 31, so let’s proceed with the discussion of the hedge fund sentiment on Atlantic Union Bankshares Corporation (NASDAQ:AUB).

Is Atlantic Union Bankshares Corporation (NASDAQ:AUB) worth your attention right now? Investors who are in the know are becoming more confident. The number of bullish hedge fund positions inched up by 5 lately. Our calculations also showed that AUB isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).

Today there are tons of formulas stock traders use to appraise publicly traded companies. A pair of the best formulas are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace their index-focused peers by a superb amount (see the details here).

Dmitry Balyasny of Balyasny Asset Managemnet

Dmitry Balyasny of Balyasny Asset Management

We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s check out the key hedge fund action encompassing Atlantic Union Bankshares Corporation (NASDAQ:AUB).

Hedge fund activity in Atlantic Union Bankshares Corporation (NASDAQ:AUB)

At the end of the fourth quarter, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 167% from one quarter earlier. On the other hand, there were a total of 6 hedge funds with a bullish position in AUB a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Renaissance Technologies was the largest shareholder of Atlantic Union Bankshares Corporation (NASDAQ:AUB), with a stake worth $14.8 million reported as of the end of September. Trailing Renaissance Technologies was Citadel Investment Group, which amassed a stake valued at $2.9 million. Paloma Partners, Balyasny Asset Management, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Sciencast Management allocated the biggest weight to Atlantic Union Bankshares Corporation (NASDAQ:AUB), around 0.07% of its 13F portfolio. AlphaCrest Capital Management is also relatively very bullish on the stock, dishing out 0.04 percent of its 13F equity portfolio to AUB.

Now, key money managers have been driving this bullishness. Paloma Partners, managed by Donald Sussman, assembled the most valuable position in Atlantic Union Bankshares Corporation (NASDAQ:AUB). Paloma Partners had $0.6 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $0.5 million position during the quarter. The following funds were also among the new AUB investors: Israel Englander’s Millennium Management, Mika Toikka’s AlphaCrest Capital Management, and Michael Gelband’s ExodusPoint Capital.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Atlantic Union Bankshares Corporation (NASDAQ:AUB) but similarly valued. We will take a look at Medpace Holdings, Inc. (NASDAQ:MEDP), Cathay General Bancorp (NASDAQ:CATY), KB Home (NYSE:KBH), and RLJ Lodging Trust (NYSE:RLJ). All of these stocks’ market caps resemble AUB’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MEDP 17 202891 -5
CATY 14 22947 -4
KBH 29 535490 3
RLJ 17 131994 -4
Average 19.25 223331 -2.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.25 hedge funds with bullish positions and the average amount invested in these stocks was $223 million. That figure was $20 million in AUB’s case. KB Home (NYSE:KBH) is the most popular stock in this table. On the other hand Cathay General Bancorp (NASDAQ:CATY) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Atlantic Union Bankshares Corporation (NASDAQ:AUB) is even less popular than CATY. Hedge funds dodged a bullet by taking a bearish stance towards AUB. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 13.0% in 2020 through April 6th but managed to beat the market by 4.2 percentage points. Unfortunately AUB wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); AUB investors were disappointed as the stock returned -42% during the same time period 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 most of these stocks already outperformed the market so far in 2020.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

Disclosure: None. This article was originally published at Insider Monkey.