Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 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 Albany International Corp. (NYSE:AIN) in this article.
Is AIN a good stock to buy now? Albany International Corp. (NYSE:AIN) investors should be aware of a decrease in hedge fund sentiment recently. Albany International Corp. (NYSE:AIN) was in 17 hedge funds’ portfolios at the end of September. The all time high for this statistic is 19. Our calculations also showed that AIN isn’t among the 30 most popular stocks among hedge funds (click for Q3 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 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 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.
Sander Gerber of Hudson Bay Capital
At Insider Monkey we scour multiple sources to uncover 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 and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Now we’re going to review the new hedge fund action surrounding Albany International Corp. (NYSE:AIN).
Do Hedge Funds Think AIN Is A Good Stock To Buy Now?
At the end of September, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards AIN over the last 21 quarters. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Albany International Corp. (NYSE:AIN), with a stake worth $17.8 million reported as of the end of September. Trailing Renaissance Technologies was D E Shaw, which amassed a stake valued at $7.1 million. Arrowstreet Capital, Two Sigma Advisors, and GAMCO Investors 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 Luminus Management allocated the biggest weight to Albany International Corp. (NYSE:AIN), around 0.18% of its 13F portfolio. Weld Capital Management is also relatively very bullish on the stock, designating 0.09 percent of its 13F equity portfolio to AIN.
Seeing as Albany International Corp. (NYSE:AIN) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few fund managers that elected to cut their full holdings by the end of the third quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management dropped the largest investment of the 750 funds tracked by Insider Monkey, valued at close to $6.3 million in stock, and Benjamin A. Smith’s Laurion Capital Management was right behind this move, as the fund dumped about $0.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Albany International Corp. (NYSE:AIN) but similarly valued. These stocks are Vital Farms, Inc. (NASDAQ:VITL), ChampionX Corporation (NYSE:CHX), PennyMac Mortgage Investment Trust (NYSE:PMT), Cooper Tire & Rubber Company (NYSE:CTB), Ameresco Inc (NYSE:AMRC), Cedar Fair, L.P. (NYSE:FUN), and Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW). This group of stocks’ market caps are similar to AIN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VITL | 11 | 58142 | 11 |
| CHX | 27 | 383178 | -3 |
| PMT | 19 | 56218 | 4 |
| CTB | 23 | 161958 | 5 |
| AMRC | 8 | 56869 | -5 |
| FUN | 13 | 112538 | -1 |
| AAWW | 27 | 254084 | 1 |
| Average | 18.3 | 154712 | 1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.3 hedge funds with bullish positions and the average amount invested in these stocks was $155 million. That figure was $46 million in AIN’s case. ChampionX Corporation (NYSE:CHX) is the most popular stock in this table. On the other hand Ameresco Inc (NYSE:AMRC) is the least popular one with only 8 bullish hedge fund positions. Albany International Corp. (NYSE:AIN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AIN is 53.5. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on AIN as the stock returned 42.2% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
