American International Group Inc (AIG): Hedge Funds Are Snapping Up Amid Activist Targeting

A market correction in the third quarter, spurred by a number of global macroeconomic concerns ended up having a negative impact on the markets and many hedge funds as a result. The stocks of smaller companies were especially hard hit during this time as investors fled to investments seen as being safer. This is evident in the fact that the Russell 2000 ETF underperformed the S&P 500 ETF by 14 percentage points between June 25 and the end of October. We also received indications that hedge funds were trimming their positions amid the market volatility and uncertainty, and given their greater inclination towards smaller cap stocks than other investors, it follows that a stronger sell-off occurred in those stocks. Let’s study the hedge fund sentiment to see how those concerns affected their ownership of American International Group Inc (NYSE:AIG) during the quarter.

American International Group Inc (NYSE:AIG) registered an increase in popularity among smart money investors during the fourth quarter and the number of bullish hedge fund positions moved up by seven. However, 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 QUALCOMM, Inc. (NASDAQ:QCOM), U.S. Bancorp (NYSE:USB), and Toronto-Dominion Bank (USA) (NYSE:TD) to gather more data points.

American International Group has been in the headlines recently as the company has been targeted by famous activist billionaire Carl Icahn. Icahn has been urging AIG to split into three independent, publicly-traded companies in order to maximize shareholder value. Here’s what Icahn said in his last open letter to the company’s board of directors: