Many investors, including Carl Icahn or Stan Druckenmiller, have been saying for a while now that the current market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the third quarter, many investors lost money due to unpredictable events such as the concerns over Valeant’s drug pricing policy that led to an overall drop among pharma stocks. Nevertheless, many of the stocks that tanked in the third quarter still sport strong fundamentals and their decline was more related to the general market sentiment rather than their individual performance and hedge funds kept their bullish stance. In this article we will find out how hedge fund sentiment to Alaska Air Group, Inc. (NYSE:ALK) changed recently.
Is Alaska Air Group, Inc. a buy right now? Investors who are in the know are reducing their bets on the stock. The number of bullish hedge fund bets shrunk by 4 lately. 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 Ralph Lauren Corp (NYSE:RL), Kimco Realty Corp (NYSE:KIM), and Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) to gather more data points.
With all of this in mind, let’s go over the fresh action surrounding Alaska Air Group, Inc. (NYSE:ALK).
What have hedge funds been doing with Alaska Air Group, Inc. (NYSE:ALK)?
Heading into Q4, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Jim Simons’s Renaissance Technologies has the biggest position in Alaska Air Group, Inc. (NYSE:ALK), worth close to $438.1 million, amounting to 1% of its total 13F portfolio. The second largest stake is held by PAR Capital Management, managed by Paul Reeder and Edward Shapiro, which holds a $361.7 million position; the fund has 7.6% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions include Cliff Asness’ AQR Capital Management, Brad Gerstner’s Altimeter Capital Management and Robert Bishop’s Impala Asset Management.