The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Atlantic Union Bankshares Corporation (NASDAQ:AUB).
Is AUB a good stock to buy now? Atlantic Union Bankshares Corporation (NASDAQ:AUB) investors should be aware of a decrease in enthusiasm from smart money in recent months. Atlantic Union Bankshares Corporation (NASDAQ:AUB) was in 9 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 14. There were 12 hedge funds in our database with AUB positions at the end of the second quarter. Our calculations also showed that AUB 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 more than 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. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
Fred Cummings of Elizabeth Park Capital
Fred Cummings of Elizabeth Park 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 check out the new hedge fund action regarding Atlantic Union Bankshares Corporation (NASDAQ:AUB).
Do Hedge Funds Think AUB Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AUB over the last 21 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Millennium Management, managed by Israel Englander, holds the number one position in Atlantic Union Bankshares Corporation (NASDAQ:AUB). Millennium Management has a $14.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Millennium Management's heels is Forest Hill Capital, managed by Mark Lee, which holds a $5 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions consist of Noam Gottesman's GLG Partners, Ken Fisher's Fisher Asset Management and Fred Cummings's Elizabeth Park Capital Management. In terms of the portfolio weights assigned to each position Forest Hill Capital allocated the biggest weight to Atlantic Union Bankshares Corporation (NASDAQ:AUB), around 2.27% of its 13F portfolio. Elizabeth Park Capital Management is also relatively very bullish on the stock, dishing out 2.21 percent of its 13F equity portfolio to AUB.
Since Atlantic Union Bankshares Corporation (NASDAQ:AUB) has experienced bearish sentiment from the aggregate hedge fund industry, logic holds that there were a few money managers that slashed their entire stakes last quarter. It's worth mentioning that Renaissance Technologies said goodbye to the biggest position of all the hedgies monitored by Insider Monkey, worth close to $2.5 million in stock, and Dmitry Balyasny's Balyasny Asset Management was right behind this move, as the fund dropped about $0.7 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 3 funds last quarter.
Let's go over 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 Repay Holdings Corporation (NASDAQ:RPAY), Dycom Industries, Inc. (NYSE:DY), Sonos, Inc. (NASDAQ:SONO), O-I Glass, Inc. (NYSE:OI), Washington Real Estate Investment Trust (NYSE:WRE), Revance Therapeutics Inc (NASDAQ:RVNC), and Cavco Industries, Inc. (NASDAQ:CVCO). This group of stocks' market values are closest to AUB's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RPAY,26,250330,8 DY,16,67971,0 SONO,32,336456,-3 OI,27,254546,2 WRE,13,71057,5 RVNC,13,118943,-1 CVCO,22,160263,-1 Average,21.3,179938,1.4 [/table]
As you can see these stocks had an average of 21.3 hedge funds with bullish positions and the average amount invested in these stocks was $180 million. That figure was $35 million in AUB's case. Sonos, Inc. (NASDAQ:SONO) is the most popular stock in this table. On the other hand Washington Real Estate Investment Trust (NYSE:WRE) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Atlantic Union Bankshares Corporation (NASDAQ:AUB) is even less popular than WRE. Our overall hedge fund sentiment score for AUB is 21.3. 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. Hedge funds clearly dropped the ball on AUB as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on AUB as the stock returned 53.1% since Q3 (through December 8th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
