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Is AMC Entertainment Holdings Inc (NYSE: AMC) a good place to invest some of your money right now? We can gain valuable information to help us answer this question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who have immense resources and contacts in the world. industry to put their financial expertise to good use. The best picks from these companies have historically outperformed the market when we factor in known risk factors, making them very valuable investment ideas.
AMC Entertainment Holdings Inc (NYSE: AMC) investors should pay attention to a recent increase in interest from hedge funds. AMC Entertainment Holdings Inc (NYSE: AMC) was listed in 19 hedge fund portfolios at the end of the first quarter of 2021. The all-time high for this statistic is 31. There were 16 hedge funds in our database with AMC holdings at the end of December. Our calculations also showed that AMC is not among the 30 most popular stocks among hedge funds (click for Q1 rank).
The reputation of hedge funds as savvy investors has been tarnished over the past decade, as their hedged returns could not keep up with the unhedged returns of stock indices. Our research has shown that small-cap hedge fund stock selection managed to beat the market by double digits every year between 1999 and 2016, but the margin for outperformance has shrunk in recent years. Nonetheless, we were still able to identify in advance a select group of hedge funds that have outperformed S&P 500 ETFs by 115 percentage points since March 2017 (see details here). We were also able to identify in advance a select group of hedge funds that underperformed the market by 10 percentage points per year between 2006 and 2017. Interestingly, the margin of underperformance of these stocks has increased in recent years. Investors who are long in the market and short on these stocks would have reported more than 27% per year between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Daniel Och, founder of OZ Management
At Insider Monkey, we scour multiple sources to uncover the next big investing idea. For example, Chuck Schumer recently said legalizing marijuana would be a Senate priority. So we check this under the radar stock who will benefit. We’re going through lists like the top 10 battery stocks to pick the next Tesla that will deliver 10x performance. Even though we only recommend positions in a tiny fraction of the companies we analyze, we check as many stocks as possible. We read letters from hedge fund investors and listen to market arguments at hedge fund conferences. You can sign up for our free daily newsletter on our homepage. Now we’ll take a look at the new hedge fund action on AMC Entertainment Holdings Inc (NYSE: AMC).
Do hedge funds think AMC is a good stock to buy now?
At the end of the first quarter, 19 of the hedge funds tracked by Insider Monkey were long in this stock, a change of 19% from the previous quarter. Below you can see how hedge fund sentiment towards AMC has developed over the past 23 quarters. With the capital of hedge funds changing hands, there is a select group of outstanding hedge fund managers who were significantly increasing their stakes (or already accumulating significant positions).
According to Insider Monkey’s hedge fund database, Ken Griffin’s Citadel Investment Group holds the largest buy position in AMC Entertainment Holdings Inc (NYSE: AMC), worth nearly $ 42 million, representing less than 0.1 %% of its total portfolio 13F. Second is 683 Capital Partners, managed by Ari Zweiman, which has a buy position of $ 29 million; the fund has 1.5% of its 13F portfolio invested in the stock. Other peers who hold long positions include DE Shaw of DE Shaw, Citadel Investment Group of Ken Griffin and OZ Management of Daniel S. Och. In terms of the portfolio weights assigned to each position, 683 Capital Partners assigned the largest weight to AMC Entertainment Holdings Inc (NYSE: AMC), approximately 1.53% of its 13F portfolio. Arbiter Partners Capital Management is also relatively very bullish on the stock, distributing 0.26% of its 13F equity portfolio to AMC.
With a general uptrend among the heavyweights, specific fund managers have led this uptrend. 683 Capital Partners, managed by Ari Zweiman, established the largest buy position in AMC Entertainment Holdings Inc (NYSE: AMC). 683 Capital Partners had invested $ 29 million in the company at the end of the quarter. Renaissance Technologies also invested $ 5.3 million in the stock during the quarter. Other funds with brand new AMC positions are Arbiter Partners Capital Management of Paul J. Isaac, Marshall Wace LLP of Paul Marshall and Ian Wace and AQR Capital Management of Cliff Asness.
Now let’s review hedge fund activity in other stocks similar to AMC Entertainment Holdings Inc (NYSE: AMC). These stocks are Acadia Healthcare Company Inc (NASDAQ: ACHC), Atea Pharmaceuticals, Inc. (NASDAQ: AVIR), Vontier Corporation (NYSE: VNT), Park Hotels & Resorts Inc. (NYSE: PK), CIT Group Inc. (NYSE : CIT), Galapagos NV (NASDAQ: GLPG) and Avis Budget Group Inc. (NASDAQ: CAR). The market caps of this group of stocks are closest to AMC’s market capitalization.
[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of HF position ACHC, 30.525135.1 AVIR, 13.1296595, -1 VNT, 38.786836.2 PK, 18.101472.5 CIT, 28.802021, -3 GLPG, 20.167561.8 CAR, 21.1724243, -7 Medium, 24.771980,0,7 [/table]
Check the table here if you have formatting issues.
As you can see, these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $ 772 million. That figure was $ 34 million in the case of AMC. Vontier Corporation (NYSE: VNT) is the most popular stock in this table. On the other hand, Atea Pharmaceuticals, Inc. (NASDAQ: AVIR) is the least popular with only 13 bullish hedge fund positions. AMC Entertainment Holdings Inc (NYSE: AMC) isn’t the least popular stock in this group, but hedge fund interest is still below average. Our overall hedge fund sentiment score for AMC is 38.4. Stocks with a 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 the 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020 and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16 and have consistently beaten the market by 7.7 percentage points. A small number of hedge funds were also right to bet on AMC as the stock has returned 242.4% since the end of the first quarter (through 7/16) and has outperformed the market by an even larger margin.
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Disclosure: none. This article originally appeared on Insider Monkey.
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