In this article we will take a look at whether hedge funds think Albemarle Corporation (NYSE:ALB) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Albemarle Corporation (NYSE:ALB) was in 38 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 40. ALB shareholders have witnessed an increase in hedge fund sentiment lately. There were 28 hedge funds in our database with ALB holdings at the end of June. Our calculations also showed that ALB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind we’re going to take a glance at the new hedge fund action surrounding Albemarle Corporation (NYSE:ALB).
Matthew Hulsizer of PEAK6 Capital
Do Hedge Funds Think ALB Is A Good Stock To Buy Now?
At the end of September, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of 36% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ALB over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Citadel Investment Group was the largest shareholder of Albemarle Corporation (NYSE:ALB), with a stake worth $61.8 million reported as of the end of September. Trailing Citadel Investment Group was PEAK6 Capital Management, which amassed a stake valued at $52 million. Himension Capital, Bridgewater Associates, and Renaissance Technologies 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 Quaero Capital allocated the biggest weight to Albemarle Corporation (NYSE:ALB), around 5.67% of its 13F portfolio. Albar Capital is also relatively very bullish on the stock, earmarking 3.79 percent of its 13F equity portfolio to ALB.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Himension Capital, managed by Jay Chen, initiated the largest position in Albemarle Corporation (NYSE:ALB). Himension Capital had $46.5 million invested in the company at the end of the quarter. Jos Shaver’s Electron Capital Partners also made a $24.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group, Larry Chen and Terry Zhang’s Tairen Capital, and Javier Velazquez’s Albar Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Albemarle Corporation (NYSE:ALB) but similarly valued. We will take a look at ViacomCBS Inc. (NASDAQ:VIAC), Canon Inc. (NYSE:CAJ), Carvana Co. (NYSE:CVNA), Gartner Inc (NYSE:IT), United Rentals, Inc. (NYSE:URI), ZTO Express (Cayman) Inc. (NYSE:ZTO), and Bilibili Inc. (NASDAQ:BILI). This group of stocks’ market caps are closest to ALB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VIAC | 64 | 1254114 | -7 |
| CAJ | 8 | 64340 | 0 |
| CVNA | 58 | 8309496 | -5 |
| IT | 33 | 2039924 | -6 |
| URI | 37 | 1382415 | -10 |
| ZTO | 20 | 1019859 | -1 |
| BILI | 35 | 1509730 | -12 |
| Average | 36.4 | 2225697 | -5.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 36.4 hedge funds with bullish positions and the average amountfginvested in these stocks was $2226 million. That figure was $318 million in ALB’s case. ViacomCBS Inc. (NASDAQ:VIAC) is the most popular stock in this table. On the other hand Canon Inc. (NYSE:CAJ) is the least popular one with only 8 bullish hedge fund positions. Albemarle Corporation (NYSE:ALB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ALB is 65.3. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on ALB as the stock returned 21.7% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Albemarle Corp (NYSE:ALB)
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Disclosure: None. This article was originally published at Insider Monkey.
