Hedge Funds Are Buying Affiliated Managers Group, Inc. (AMG)

Is Affiliated Managers Group, Inc. (NYSE:AMG) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Affiliated Managers Group, Inc. (NYSE:AMG) investors should pay attention to an increase in activity from the world’s largest hedge funds of late. Affiliated Managers Group, Inc. (NYSE:AMG) was in 30 hedge funds’ portfolios at the end of June. The all time high for this statistic is 38. Our calculations also showed that AMG isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the 21st century investor’s toolkit there are plenty of gauges stock traders put to use to evaluate stocks. A pair of the most innovative gauges are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the elite fund managers can outperform the broader indices by a very impressive margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Lei Zhang Hillhouse Capital

Lei Zhang of Hillhouse Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s view the new hedge fund action regarding Affiliated Managers Group, Inc. (NYSE:AMG).

Do Hedge Funds Think AMG Is A Good Stock To Buy Now?

Heading into the third quarter of 2021, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 15% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AMG over the last 24 quarters. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

Among these funds, Southeastern Asset Management held the most valuable stake in Affiliated Managers Group, Inc. (NYSE:AMG), which was worth $233 million at the end of the second quarter. On the second spot was Lyrical Asset Management which amassed $155.7 million worth of shares. Ariel Investments, Arrowstreet Capital, and Hillhouse Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Southeastern Asset Management allocated the biggest weight to Affiliated Managers Group, Inc. (NYSE:AMG), around 4.68% of its 13F portfolio. Wallace Capital Management is also relatively very bullish on the stock, earmarking 2.81 percent of its 13F equity portfolio to AMG.

As one would reasonably expect, key hedge funds were breaking ground themselves. AlphaCrest Capital Management, managed by Mika Toikka, created the most valuable position in Affiliated Managers Group, Inc. (NYSE:AMG). AlphaCrest Capital Management had $1.6 million invested in the company at the end of the quarter. Jinghua Yan’s TwinBeech Capital also made a $0.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Donald Sussman’s Paloma Partners, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Qing Li’s Sciencast Management.

Let’s also examine hedge fund activity in other stocks similar to Affiliated Managers Group, Inc. (NYSE:AMG). We will take a look at DCP Midstream LP (NYSE:DCP), Foot Locker, Inc. (NYSE:FL), 360 DigiTech, Inc. (NASDAQ:QFIN), Reynolds Consumer Products Inc. (NASDAQ:REYN), MultiPlan Corporation (NYSE:MPLN), Medpace Holdings, Inc. (NASDAQ:MEDP), and Grupo Aval Acciones y Valores S.A. (NYSE:AVAL). This group of stocks’ market caps match AMG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DCP 3 31363 -1
FL 31 416162 3
QFIN 14 82360 -5
REYN 14 108385 -5
MPLN 16 480813 -14
MEDP 24 337127 3
AVAL 4 7834 -1
Average 15.1 209149 -2.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.1 hedge funds with bullish positions and the average amount invested in these stocks was $209 million. That figure was $785 million in AMG’s case. Foot Locker, Inc. (NYSE:FL) is the most popular stock in this table. On the other hand DCP Midstream LP (NYSE:DCP) is the least popular one with only 3 bullish hedge fund positions. Affiliated Managers Group, Inc. (NYSE:AMG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AMG is 80.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on AMG as the stock returned 3.8% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.