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Here is What Hedge Funds Think About Altria Group Inc (MO)

We can judge whether Altria Group Inc (NYSE:MO) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.

Altria Group Inc (NYSE:MO) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 41 hedge funds’ portfolios at the end of the fourth quarter of 2018. At the end of this article we will also compare MO to other stocks including United Technologies Corporation (NYSE:UTX), Toronto-Dominion Bank (NYSE:TD), and Texas Instruments Incorporated (NASDAQ:TXN) to get a better sense of its popularity.

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RENAISSANCE TECHNOLOGIES

Let’s take a look at the latest hedge fund action regarding Altria Group Inc (NYSE:MO).

What have hedge funds been doing with Altria Group Inc (NYSE:MO)?

At the end of the fourth quarter, a total of 41 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 36 hedge funds with a bullish position in MO a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

MO_mar2019

More specifically, Gardner Russo & Gardner was the largest shareholder of Altria Group Inc (NYSE:MO), with a stake worth $263.3 million reported as of the end of September. Trailing Gardner Russo & Gardner was Two Sigma Advisors, which amassed a stake valued at $147.5 million. Adage Capital Management, Renaissance Technologies, and Citadel Investment Group were also very fond of the stock, giving the stock large weights in their portfolios.

Due to the fact that Altria Group Inc (NYSE:MO) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of fund managers who sold off their full holdings in the third quarter. It’s worth mentioning that George Soros’s Soros Fund Management dropped the largest stake of the 700 funds monitored by Insider Monkey, valued at about $10.6 million in call options, and Bruce Kovner’s Caxton Associates LP was right behind this move, as the fund dumped about $6 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Altria Group Inc (NYSE:MO) but similarly valued. These stocks are United Technologies Corporation (NYSE:UTX), Toronto-Dominion Bank (NYSE:TD), Texas Instruments Incorporated (NASDAQ:TXN), and Thermo Fisher Scientific Inc. (NYSE:TMO). All of these stocks’ market caps resemble MO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
UTX 64 5060168 5
TD 17 887418 -3
TXN 44 2402004 -4
TMO 67 3829829 11
Average 48 3044855 2.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 48 hedge funds with bullish positions and the average amount invested in these stocks was $3045 million. That figure was $915 million in MO’s case. Thermo Fisher Scientific Inc. (NYSE:TMO) is the most popular stock in this table. On the other hand Toronto-Dominion Bank (NYSE:TD) is the least popular one with only 17 bullish hedge fund positions. Altria Group Inc (NYSE:MO) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Hedge funds were also right about betting on MO, though not to the same extent, as the stock returned 14.9% and outperformed the market as well.

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

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