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Sentiment Flatlines, But Smart Money Still Loves AerCap Holdings N.V. (AER)

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It’s a little-known fact that stock performance is not evenly distributed (i.e. you don’t have a 50/50 chance of picking a market-beating stock). In fact, despite the S&P 500 gaining about 5.2% between November 1, 2014 and October 30, 2015, less than 49% of the stocks in the index beat the market during that time. In contrast, the 30 stocks from the index which were the most popular among the investors that we track returned 9.5% during that time and 63% of them beat the market. This shows that while hedge funds get a lot of flak from the mainstream media for their performance, it can be rewarding to follow their moves using the right sets of data. Even then, there is never a fool proof strategy to generating returns, as even the collective wisdom of top hedge funds gets it wrong some times, as in the case of some of their top picks from the index like Micron and Anadarko. The data though, shows that following the collective wisdom of select hedge funds can be a very wise move overall.

Hedge fund interest in AerCap Holdings N.V. (NYSE:AER) shares was flat during the last quarter. This is usually a negative indicator. At the end of this article we will also compare AER to other stocks including Staples, Inc. (NASDAQ:SPLS), Sensata Technologies Holding N.V. (NYSE:ST), and Fibria Celulose SA (ADR) (NYSE:FBR) to get a better sense of its popularity.

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In the eyes of most investors, hedge funds are seen as underperforming, outdated investment tools of years past. While there are over an 8,000 funds in operation at the moment, we look at the masters of this club, around 700 funds. These money managers command bulk of the hedge fund industry’s total capital, and by observing their top stock picks, Insider Monkey has formulated various investment strategies that have historically surpassed the market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Keeping this in mind, let’s take a glance at the recent action regarding AerCap Holdings N.V. (NYSE:AER).

What have hedge funds been doing with AerCap Holdings N.V. (NYSE:AER)?

Heading into Q4, a total of 77 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially (or had already accumulated large positions).

Of the funds tracked by Insider Monkey, David Einhorn’s Greenlight Capital has the largest position in AerCap Holdings N.V. (NYSE:AER), worth close to $280.9 million, amounting to 4.7% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $215.5 million position; 0.2% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism comprise Leon Cooperman’s Omega Advisors, Lee Ainslie’s Maverick Capital, and D E Shaw.

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