American Express Company (AXP): Are Hedge Funds Right About This Stock?

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Because American Express Company (NYSE:AXP) has experienced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of fund managers who were dropping their positions entirely in the third quarter. Intriguingly, James Crichton’s Hitchwood Capital Management sold off the largest investment of all the hedgies watched by Insider Monkey, valued at about $69.9 million in call options. Gilchrist Berg’s fund, Water Street Capital, also said goodbye to its call options, about $23.3 million worth. These moves are interesting, as total hedge fund interest dropped by 5 funds in the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as American Express Company (NYSE:AXP) but similarly valued. These stocks are Diageo plc (ADR) (NYSE:DEO), Honeywell International Inc. (NYSE:HON), American International Group Inc (NYSE:AIG), and Toronto-Dominion Bank (USA) (NYSE:TD). All of these stocks’ market caps are closest to AXP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DEO 25 1148398 -1
HON 46 1294250 -3
AIG 94 8425524 -5
TD 16 342207 -3

As you can see these stocks had an average of 45.25 hedge funds with bullish positions and the average amount invested in these stocks was $2,803 million. That figure was $16,120 million in AXP’s case. American International Group Inc (NYSE:AIG) is the most popular stock in this table. On the other hand Toronto-Dominion Bank (USA) (NYSE:TD) is the least popular one with only 16 bullish hedge fund positions. American Express Company (NYSE:AXP) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AIG might be a better candidate to consider a long position.

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