Here is What Hedge Funds Think About The Allstate Corporation (ALL)

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about The Allstate Corporation (NYSE:ALL) in this article.

Is The Allstate Corporation (NYSE:ALL) ready to rally soon? The smart money was betting on the stock. The number of long hedge fund positions advanced by 3 lately. The Allstate Corporation (NYSE:ALL) was in 41 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 48. Our calculations also showed that ALL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 38 hedge funds in our database with ALL holdings at the end of December.

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation, which is why we are checking out this inflation play. We go through lists like 10 best gold stocks to buy to identify promising stocks. 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. Now let’s take a look at the key hedge fund action surrounding The Allstate Corporation (NYSE:ALL).

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

Heading into the second quarter of 2021, a total of 41 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ALL over the last 23 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

Among these funds, AQR Capital Management held the most valuable stake in The Allstate Corporation (NYSE:ALL), which was worth $397.5 million at the end of the fourth quarter. On the second spot was GLG Partners which amassed $82.1 million worth of shares. Arrowstreet Capital, Citadel Investment Group, and Prana 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 Prana Capital Management allocated the biggest weight to The Allstate Corporation (NYSE:ALL), around 4.72% of its 13F portfolio. Te Ahumairangi Investment Management is also relatively very bullish on the stock, designating 0.99 percent of its 13F equity portfolio to ALL.

Consequently, specific money managers have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, assembled the biggest call position in The Allstate Corporation (NYSE:ALL). Balyasny Asset Management had $8.7 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $6.6 million investment in the stock during the quarter. The other funds with brand new ALL positions are Alec Litowitz and Ross Laser’s Magnetar Capital, Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management, and Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital).

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as The Allstate Corporation (NYSE:ALL) but similarly valued. These stocks are LyondellBasell Industries NV (NYSE:LYB), International Flavors & Fragrances Inc (NYSE:IFF), Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA), STMicroelectronics N.V. (NYSE:STM), MSCI Inc (NYSE:MSCI), Wipro Limited (NYSE:WIT), and DexCom, Inc. (NASDAQ:DXCM). This group of stocks’ market values are closest to ALL’s market value.

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As you can see these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $1076 million. That figure was $894 million in ALL’s case. DexCom, Inc. (NASDAQ:DXCM) is the most popular stock in this table. On the other hand Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA) is the least popular one with only 7 bullish hedge fund positions. The Allstate Corporation (NYSE:ALL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ALL is 68.3. 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 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. Hedge funds were also right about betting on ALL, though not to the same extent, as the stock returned 8.6% since Q1 (through June 18th) and outperformed the market as well.

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