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AerCap Holdings N.V. (AER): Hedge Funds Are Sticking Around

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of AerCap Holdings N.V. (NYSE:AER).

AerCap Holdings N.V. (NYSE:AER) has experienced a decrease in support from the world’s most elite money managers recently. Our calculations also showed that AER isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.

In the eyes of most shareholders, hedge funds are seen as worthless, old investment tools of the past. While there are greater than 8000 funds trading at the moment, Our researchers choose to focus on the aristocrats of this club, around 850 funds. It is estimated that this group of investors watch over bulk of the smart money’s total capital, and by observing their top picks, Insider Monkey has found a number of investment strategies that have historically beaten Mr. Market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

TIGER MANAGEMENT

Julian Robertson of Tiger Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to go over the fresh hedge fund action regarding AerCap Holdings N.V. (NYSE:AER).

Hedge fund activity in AerCap Holdings N.V. (NYSE:AER)

At the end of the first quarter, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in AER over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in AerCap Holdings N.V. (NYSE:AER) was held by Eagle Capital Management, which reported holding $200.9 million worth of stock at the end of September. It was followed by Lyrical Asset Management with a $166.2 million position. Other investors bullish on the company included Greenlight Capital, Arrowstreet Capital, and Basswood Capital. In terms of the portfolio weights assigned to each position Greenlight Capital allocated the biggest weight to AerCap Holdings N.V. (NYSE:AER), around 10.62% of its 13F portfolio. Elm Ridge Capital is also relatively very bullish on the stock, earmarking 10.19 percent of its 13F equity portfolio to AER.

Since AerCap Holdings N.V. (NYSE:AER) has experienced a decline in interest from the smart money, logic holds that there lies a certain “tier” of hedgies that elected to cut their positions entirely in the first quarter. Intriguingly, Charles Davidson and Joseph Jacobs’s Wexford Capital dropped the largest investment of the 750 funds followed by Insider Monkey, valued at an estimated $9.8 million in stock, and Anand Parekh’s Alyeska Investment Group was right behind this move, as the fund cut about $3.1 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 4 funds in the first quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as AerCap Holdings N.V. (NYSE:AER) but similarly valued. These stocks are BOK Financial Corporation (NASDAQ:BOKF), FirstCash, Inc. (NASDAQ:FCFS), Anixter International Inc. (NYSE:AXE), and Emergent Biosolutions Inc (NYSE:EBS). All of these stocks’ market caps are similar to AER’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BOKF 22 145009 7
FCFS 16 107030 0
AXE 21 541008 -22
EBS 17 114485 5
Average 19 226883 -2.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $227 million. That figure was $616 million in AER’s case. BOK Financial Corporation (NASDAQ:BOKF) is the most popular stock in this table. On the other hand FirstCash, Inc. (NASDAQ:FCFS) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks AerCap Holdings N.V. (NYSE:AER) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on AER as the stock returned 41.5% so far in Q2 (through the end of May) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.