General Electric Company (NYSE:GE) won a large order today, with South Korea awarding the company a contract worth as much as $3.5 billion to supply engines for the nation’s KF-X fighter jet program. General Electric beat out a European consortium of companies to win the order by scoring better results in the four main categories of technology, management, cost, and localization. South Korea intends to localize the production of the parts of the engine by 2022. The deal could be signed next month. The market hasn’t jumped out of its shoes upon hearing of the deal, as GE shares are actually down very slightly this morning.
Is General Electric Company (NYSE:GE) a good investment now? The smart money is buying. The number of long hedge fund positions increased by 10 in the first quarter. GE was in 64 hedge funds’ portfolios at the end of the first quarter of 2016. There were 54 hedge funds in our database with GE holdings at the end of the fourth quarter. At the end of this article we will also compare GE to other stocks including Amazon.com, Inc. (NASDAQ:AMZN), Wells Fargo & Co (NYSE:WFC), and AT&T Inc. (NYSE:T) to get a better sense of its popularity.
We track prominent investors and hedge funds because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 15 most popular small-cap stocks among a select group of investors delivered a monthly alpha of 80 basis points between 1999 and 2012 (see the details here).
Of the funds tracked by Insider Monkey, Nelson Peltz’s Trian Partners has the number one position in General Electric Company (NYSE:GE), worth close to $2.36 billion, amounting to 22.7% of its total 13F portfolio. Coming in second is Fisher Asset Management, managed by Ken Fisher, which holds a $966.7 million position; 1.8% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions contain Warren Buffett’s Berkshire Hathaway, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, and Phill Gross and Robert Atchinson’s Adage Capital Management.
On the next page we’ll look at some funds that took up positions in GE during Q1, as well as compare the stock to a handful of others with similar market caps.