Where Do Hedge Funds Stand On Antero Midstream Corp (AM)?

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 Antero Midstream Corp (NYSE:AM).

Is Antero Midstream Corp (NYSE:AM) a good investment now? Money managers were betting on the stock. The number of long hedge fund bets advanced by 5 lately. Antero Midstream Corp (NYSE:AM) was in 19 hedge funds’ portfolios at the end of September. The all time high for this statistic is 19. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that AM 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). There were 14 hedge funds in our database with AM positions at the end of the second quarter.

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.

Glenn Greenberg

Glenn Greenberg of Brave Warrior Capital

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. Keeping this in mind let’s analyze the recent hedge fund action encompassing Antero Midstream Corp (NYSE:AM).

Do Hedge Funds Think AM Is A Good Stock To Buy Now?

At the end of September, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 36% from the second quarter of 2020. By comparison, 16 hedge funds held shares or bullish call options in AM a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Brave Warrior Capital, managed by Glenn Greenberg, holds the most valuable position in Antero Midstream Corp (NYSE:AM). Brave Warrior Capital has a $45.5 million position in the stock, comprising 2% of its 13F portfolio. The second most bullish fund manager is Aristeia Capital, led by Robert Henry Lynch, holding a $29.4 million position; 1.2% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions comprise Himanshu H. Shah’s Shah Capital Management, Mitch Cantor’s Mountain Lake Investment Management and Robert Pitts’s Steadfast Capital Management. In terms of the portfolio weights assigned to each position Shah Capital Management allocated the biggest weight to Antero Midstream Corp (NYSE:AM), around 6.03% of its 13F portfolio. Mountain Lake Investment Management is also relatively very bullish on the stock, dishing out 5.46 percent of its 13F equity portfolio to AM.

Consequently, some big names were leading the bulls’ herd. Balyasny Asset Management, managed by Dmitry Balyasny, established the largest position in Antero Midstream Corp (NYSE:AM). Balyasny Asset Management had $2.9 million invested in the company at the end of the quarter. Greg Eisner’s Engineers Gate Manager also initiated a $1 million position during the quarter. The other funds with new positions in the stock are Renaissance Technologies, Alex Lieblong’s Key Colony Management, and Israel Englander’s Millennium Management.

Let’s check out hedge fund activity in other stocks similar to Antero Midstream Corp (NYSE:AM). These stocks are BlackBerry Limited (NYSE:BB), Burning Rock Biotech Limited (NASDAQ:BNR), Avnet, Inc. (NASDAQ:AVT), TTEC Holdings, Inc. (NASDAQ:TTEC), Insperity Inc (NYSE:NSP), United States Cellular Corporation (NYSE:USM), and SINA Corp (NASDAQ:SINA). This group of stocks’ market caps are similar to AM’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BB 24 320931 2
BNR 11 211903 -7
AVT 31 543982 2
TTEC 14 42342 2
NSP 24 224616 -5
USM 13 92934 -3
SINA 22 176746 6
Average 19.9 230493 -0.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.9 hedge funds with bullish positions and the average amount invested in these stocks was $230 million. That figure was $138 million in AM’s case. Avnet, Inc. (NASDAQ:AVT) is the most popular stock in this table. On the other hand Burning Rock Biotech Limited (NASDAQ:BNR) is the least popular one with only 11 bullish hedge fund positions. Antero Midstream Corp (NYSE:AM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AM is 60. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on AM as the stock returned 54.4% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.

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