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Alcoa Inc (AA): Are Hedge Funds Right About This Stock?

As one would reasonably expect, key money managers have been driving this bullishness. Baupost Group, managed by Seth Klarman, assembled the most valuable position in Alcoa Inc (NYSE:AA). The fund had $504.9 million invested in the company at the end of the quarter. Jacob Doft’s Highline Capital Management also initiated a $35.8 million position during the quarter. The following funds were also among the new AA investors: Steve Cohen’s Point72 Asset Management, Paul Singer’s Elliott Management, and Kevin Michael Ulrich and Anthony Davis’s Anchorage Advisors.

Let’s also examine hedge fund activity in other stocks similar to Alcoa Inc (NYSE:AA). We will take a look at Cenovus Energy Inc (USA) (NYSE:CVE), Citizens Financial Group Inc (NYSE:CFG), Genuine Parts Company (NYSE:GPC), and Verisk Analytics, Inc. (NASDAQ:VRSK). All of these stocks’ market caps resemble AA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CVE 16 725270 -4
CFG 56 1548901 18
GPC 23 391727 -4
VRSK 28 723625 -9

As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $847 million. That figure was $1.59 billion in AA’s case, which is a positive sign. Citizens Financial Group Inc (NYSE:CFG) is the most popular stock in this table, while Cenovus Energy Inc (USA) (NYSE:CVE) is the least popular one with only 16 bullish hedge fund positions. Alcoa Inc (NYSE:AA) is not the most popular stock in this group, but hedge fund interest is still above average. Although this is a slightly positive signal, we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CFG might be a better candidate to consider a long position.

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