A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended December 31st, so let’s proceed with the discussion of the hedge fund sentiment on American International Group Inc (NYSE:AIG).
Is AIG stock a buy or sell? American International Group Inc (NYSE:AIG) was in 41 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 101. AIG investors should be aware of an increase in enthusiasm from smart money recently. There were 38 hedge funds in our database with AIG positions at the end of the third quarter. Our calculations also showed that AIG isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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 124 percentage points since March 2017 (see the details here).
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Do Hedge Funds Think AIG Is A Good Stock To Buy Now?
At the end of December, a total of 41 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards AIG over the last 22 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ric Dillon’s Diamond Hill Capital has the biggest position in American International Group Inc (NYSE:AIG), worth close to $738.2 million, comprising 3.5% of its total 13F portfolio. The second most bullish fund manager is Pzena Investment Management, led by Richard S. Pzena, holding a $661.3 million position; 3.1% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, Jeremy Hosking’s Hosking Partners and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position First Pacific Advisors LLC allocated the biggest weight to American International Group Inc (NYSE:AIG), around 5.45% of its 13F portfolio. Levin Easterly Partners is also relatively very bullish on the stock, designating 3.84 percent of its 13F equity portfolio to AIG.
As aggregate interest increased, key hedge funds have jumped into American International Group Inc (NYSE:AIG) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the largest position in American International Group Inc (NYSE:AIG). Balyasny Asset Management had $19.2 million invested in the company at the end of the quarter. Sander Gerber’s Hudson Bay Capital Management also initiated a $8.3 million position during the quarter. The other funds with new positions in the stock are Anton Schutz’s Mendon Capital Advisors, Michael Gelband’s ExodusPoint Capital, and Noam Gottesman’s GLG Partners.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as American International Group Inc (NYSE:AIG) but similarly valued. These stocks are Banco Santander (Brasil) SA (NYSE:BSBR), Mizuho Financial Group Inc. (NYSE:MFG), Alcon Inc. (NYSE:ALC), Tencent Music Entertainment Group (NYSE:TME), Wipro Limited (NYSE:WIT), Zimmer Biomet Holdings Inc (NYSE:ZBH), and Marvell Technology Group Ltd. (NASDAQ:MRVL). This group of stocks’ market valuations are closest to AIG’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 23.6 hedge funds with bullish positions and the average amount invested in these stocks was $542 million. That figure was $2081 million in AIG’s case. Zimmer Biomet Holdings Inc (NYSE:ZBH) is the most popular stock in this table. On the other hand Mizuho Financial Group Inc. (NYSE:MFG) is the least popular one with only 5 bullish hedge fund positions. American International Group Inc (NYSE:AIG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AIG is 57.7. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on AIG as the stock returned 24.5% since the end of Q4 (through 3/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow American International Group Inc. (NYSE:AIG)
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Disclosure: None. This article was originally published at Insider Monkey.