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Hedge Funds Aren’t Crazy About American Airlines Group Inc (AAL) Anymore

Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30. In this article we are going to take a look at smart money sentiment towards American Airlines Group Inc (NASDAQ:AAL).

American Airlines Group Inc was in 77 hedge funds’ portfolios at the end of September. AAL shareholders have witnessed a decrease in hedge fund sentiment of late. There were 85 hedge funds in our database with AAL holdings at the end of the previous quarter. 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 IntercontinentalExchange Inc (NYSE:ICE), PG&E Corporation (NYSE:PCG), and Exelon Corporation (NYSE:EXC) to gather more data points.

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In the 21st century investor’s toolkit there are a lot of methods investors have at their disposal to assess stocks. A pair of the best methods are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the best investment managers can outclass the broader indices by a very impressive amount (see the details here).

Keeping this in mind, let’s view the fresh action encompassing American Airlines Group Inc (NASDAQ:AAL).

What have hedge funds been doing with American Airlines Group Inc (NASDAQ:AAL)?

At the Q3’s end, a total of 77 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the previous quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Highland Capital Management, managed by James Dondero, holds the most valuable position in American Airlines Group Inc (NASDAQ:AAL). Highland Capital Management has a $204.2 million call position in the stock, comprising 6% of its 13F portfolio. Sitting at the No. 2 spot is Ross Margolies of Stelliam Investment Management, with a $119.4 million position; the fund has 3% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish encompass Mike Masters’s Masters Capital Management, Cliff Asness’s AQR Capital Management, and Paul Reeder and Edward Shapiro’s PAR Capital Management.

Since American Airlines Group Inc (NASDAQ:AAL) has witnessed a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there were a few hedgies who were dropping their entire stakes in the third quarter. Among them, Neil Chriss’s fund, Hutchin Hill Capital, dropped its call options., about $79.9 million worth.

Let’s now review hedge fund activity in other stocks similar to American Airlines Group Inc (NASDAQ:AAL). These stocks are IntercontinentalExchange Inc (NYSE:ICE), PG&E Corporation (NYSE:PCG), Exelon Corporation (NYSE:EXC), and Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX). All of these stocks’ market caps are similar to AAL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ICE 38 2017380 -5
PCG 20 547876 -2
EXC 40 954812 10
VRTX 51 1412232 6

As you can see these stocks had an average of 37 hedge funds with bullish positions and the average amount invested in these stocks was $1.23 billion, compared to $1.82 billion in AAL’s case. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is the most popular stock in this table with 51 funds holding shares. On the other hand PG&E Corporation (NYSE:PCG) is the least popular one. Compared to these stocks, American Airlines Group Inc (NASDAQ:AAL) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially acquire a long position.

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