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. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. What do these smart investors think about Investors Title Company (NASDAQ:ITIC)?
Investors Title Company (NASDAQ:ITIC) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that ITIC 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). 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 Party City Holdco Inc (NYSE:PRTY), Gold Standard Ventures Corp (NYSE:GSV), and Lannett Company, Inc. (NYSE:LCI) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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 take a look at the latest hedge fund action encompassing Investors Title Company (NASDAQ:ITIC).
How have hedgies been trading Investors Title Company (NASDAQ:ITIC)?
At the end of September, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards ITIC over the last 21 quarters. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Markel Gayner Asset Management, managed by Tom Gayner, holds the number one position in Investors Title Company (NASDAQ:ITIC). Markel Gayner Asset Management has a $27.7 million position in the stock, comprising 0.5% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, with a $3.2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other members of the smart money that hold long positions contain Noam Gottesman’s GLG Partners, Scott Wallace’s Wallace Capital Management and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Markel Gayner Asset Management allocated the biggest weight to Investors Title Company (NASDAQ:ITIC), around 0.47% of its 13F portfolio. Wallace Capital Management is also relatively very bullish on the stock, setting aside 0.09 percent of its 13F equity portfolio to ITIC.
Seeing as Investors Title Company (NASDAQ:ITIC) has faced a decline in interest from the smart money, it’s safe to say that there was a specific group of hedge funds who sold off their entire stakes in the third quarter. It’s worth mentioning that Cliff Asness’s AQR Capital Management cut the biggest investment of the “upper crust” of funds followed by Insider Monkey, comprising close to $0.3 million in stock, and Chuck Royce’s Royce & Associates was right behind this move, as the fund sold off about $0 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Investors Title Company (NASDAQ:ITIC) but similarly valued. These stocks are Party City Holdco Inc (NYSE:PRTY), Gold Standard Ventures Corp (NYSE:GSV), Lannett Company, Inc. (NYSE:LCI), Paratek Pharmaceuticals Inc (NASDAQ:PRTK), America First Multifamily Investors, L.P. (NASDAQ:ATAX), Rafael Holdings, Inc. (NYSE:RFL), and Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI). This group of stocks’ market caps resemble ITIC’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 8.3 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $33 million in ITIC’s case. Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) is the most popular stock in this table. On the other hand America First Multifamily Investors, L.P. (NASDAQ:ATAX) is the least popular one with only 1 bullish hedge fund positions. Investors Title Company (NASDAQ:ITIC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ITIC is 54.2. 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 November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on ITIC as the stock returned 46% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.