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Hedge Funds Cashing Out Of Athene Holding Ltd. (ATH)

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Athene Holding Ltd. (NYSE:ATH) based on that data.

Athene Holding Ltd. (NYSE:ATH) shareholders have witnessed a decrease in support from the world’s most elite money managers lately. ATH was in 32 hedge funds’ portfolios at the end of March. There were 35 hedge funds in our database with ATH holdings at the end of the previous quarter. Our calculations also showed that ATH isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 87% since March 2017 and outperformed the S&P 500 ETFs by more than 51 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Christian Leone of Luxor Capital Group

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a glance at the recent hedge fund action surrounding Athene Holding Ltd. (NYSE:ATH).

What does smart money think about Athene Holding Ltd. (NYSE:ATH)?

Heading into the second quarter of 2020, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ATH over the last 18 quarters. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).

Among these funds, Tiger Global Management LLC held the most valuable stake in Athene Holding Ltd. (NYSE:ATH), which was worth $185.3 million at the end of the third quarter. On the second spot was Samlyn Capital which amassed $132 million worth of shares. AQR Capital Management, Luxor Capital Group, and Lakewood 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 OCO Capital Partners allocated the biggest weight to Athene Holding Ltd. (NYSE:ATH), around 24.3% of its 13F portfolio. Serengeti Asset Management is also relatively very bullish on the stock, earmarking 14.88 percent of its 13F equity portfolio to ATH.

Judging by the fact that Athene Holding Ltd. (NYSE:ATH) has experienced falling interest from hedge fund managers, we can see that there were a few hedgies who sold off their entire stakes last quarter. Interestingly, Brian J. Higgins’s King Street Capital dropped the biggest investment of all the hedgies monitored by Insider Monkey, comprising close to $91.3 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also said goodbye to its stock, about $38.4 million worth. These moves are important to note, as total hedge fund interest dropped by 3 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to Athene Holding Ltd. (NYSE:ATH). These stocks are Ingredion Incorporated (NYSE:INGR), Aramark (NYSE:ARMK), Companhia de Saneamento Basico do Estado de Sao Paulo – SABESP (NYSE:SBS), and BorgWarner Inc. (NYSE:BWA). This group of stocks’ market valuations resemble ATH’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
INGR 18 177212 -5
ARMK 29 595601 -7
SBS 8 218391 -4
BWA 30 482313 3
Average 21.25 368379 -3.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.25 hedge funds with bullish positions and the average amount invested in these stocks was $368 million. That figure was $841 million in ATH’s case. BorgWarner Inc. (NYSE:BWA) is the most popular stock in this table. On the other hand Companhia de Saneamento Basico do Estado de Sao Paulo – SABESP (NYSE:SBS) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Athene Holding Ltd. (NYSE:ATH) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. Unfortunately ATH wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on ATH were disappointed as the stock returned 16.4% during the second quarter (through the end of May) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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