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Is First American Financial Corp (FAF) Going to Burn These Hedge Funds?

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Is First American Financial Corp (NYSE:FAF) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from industry insiders. They fail miserably sometimes but historically their consensus stock picks outperformed the market after adjusting for known risk factors.

First American Financial Corp (NYSE:FAF) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 27 hedge funds’ portfolios at the end of the third quarter of 2016. 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 Jones Lang LaSalle Inc (NYSE:JLL), Graco Inc. (NYSE:GGG), and AMC Networks Inc (NASDAQ:AMCX) to gather more data points.

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What does the smart money think about First American Financial Corp (NYSE:FAF)?

At Q3’s end, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged from one quarter earlier. The flat showing comes after two quarters in which ownership of the stock surged by more than 70% total. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

HedgeFundSentimentChart

When looking at the institutional investors followed by Insider Monkey, Ariel Investments, managed by John W. Rogers, holds the biggest position in First American Financial Corp (NYSE:FAF). Ariel Investments has a $216.4 million position in the stock, comprising 2.6% of its 13F portfolio. Coming in second is Fisher Asset Management, managed by Ken Fisher, which holds a $57.7 million position. Remaining members of the smart money that are bullish include Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group and Cliff Asness’ AQR Capital Management.

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