There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze American Axle & Manufact. Holdings, Inc. (NYSE:AXL).
Hedge fund interest in American Axle & Manufact. Holdings, Inc. (NYSE:AXL) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Orbotech Ltd. (NASDAQ:ORBK), ACCO Brands Corporation (NYSE:ACCO), and Green Dot Corporation (NYSE:GDOT) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
With all of this in mind, let’s analyze the new action surrounding American Axle & Manufact. Holdings, Inc. (NYSE:AXL).
What does the smart money think about American Axle & Manufact. Holdings, Inc. (NYSE:AXL)?
At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Thomas E. Claugus’s GMT Capital has the biggest position in American Axle & Manufact. Holdings, Inc. (NYSE:AXL), worth close to $57.8 million, comprising 1.2% of its total 13F portfolio. Sitting at the No. 2 spot is Robert Polak of Anchor Bolt Capital, with a $49.6 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions comprise Steve Cohen’s Point72 Asset Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Joel Greenblatt’s Gotham Asset Management.
Because American Axle & Manufact. Holdings, Inc. (NYSE:AXL) has experienced no change in sentiment from the aggregate hedge fund industry, we will take a look at a few fund managers that elected to cut their positions entirely last quarter. Intriguingly, Gregg Moskowitz’s Interval Partners said goodbye to the largest stake of the 700 funds watched by Insider Monkey, worth an estimated $7.5 million in stock. Jim Simons’s fund, Renaissance Technologies, also dumped its stock, about $1.9 million worth of AXL shares. These moves are intriguing to say the least, 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 similar to American Axle & Manufact. Holdings, Inc. (NYSE:AXL). We will take a look at Orbotech Ltd. (NASDAQ:ORBK), ACCO Brands Corporation (NYSE:ACCO), Green Dot Corporation (NYSE:GDOT), and Amplify Snack Brands Inc (NYSE:BETR). All of these stocks’ market caps are closest to AXL’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $97 million. That figure was $211 million in AXL’s case. ACCO Brands Corporation (NYSE:ACCO) is the most popular stock in this table. On the other hand Amplify Snack Brands Inc (NYSE:BETR) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks American Axle & Manufact. Holdings, Inc. (NYSE:AXL) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.