The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 752 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Air Lease Corp (NYSE:AL).
Air Lease Corp (NYSE:AL) investors should be aware of an increase in enthusiasm from smart money lately. AL was in 23 hedge funds’ portfolios at the end of September. There were 18 hedge funds in our database with AL positions at the end of the previous quarter. Our calculations also showed that AL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Matthew Lindenbaum of Basswood Capital
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to analyze the key hedge fund action surrounding Air Lease Corp (NYSE:AL).
What does smart money think about Air Lease Corp (NYSE:AL)?
Heading into the fourth quarter of 2019, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 28% from the second quarter of 2019. On the other hand, there were a total of 27 hedge funds with a bullish position in AL a year ago. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
The largest stake in Air Lease Corp (NYSE:AL) was held by Lyrical Asset Management, which reported holding $153.6 million worth of stock at the end of September. It was followed by Royce & Associates with a $119.8 million position. Other investors bullish on the company included Selz Capital, Basswood Capital, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Selz Capital allocated the biggest weight to Air Lease Corp (NYSE:AL), around 10.63% of its 13F portfolio. Tegean Capital Management is also relatively very bullish on the stock, dishing out 7.96 percent of its 13F equity portfolio to AL.
Now, specific money managers have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the most valuable position in Air Lease Corp (NYSE:AL). Balyasny Asset Management had $7.8 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also initiated a $1.2 million position during the quarter. The other funds with brand new AL positions are Matthew Hulsizer’s PEAK6 Capital Management, Matthew Hulsizer’s PEAK6 Capital Management, and Israel Englander’s Millennium Management.
Let’s check out hedge fund activity in other stocks similar to Air Lease Corp (NYSE:AL). These stocks are Highwoods Properties Inc (NYSE:HIW), Nuance Communications Inc. (NASDAQ:NUAN), Ashland Global Holdings Inc.. (NYSE:ASH), and ADT Inc. (NYSE:ADT). This group of stocks’ market values resemble AL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HIW | 20 | 220525 | 7 |
| NUAN | 27 | 741239 | -1 |
| ASH | 30 | 1196782 | -1 |
| ADT | 16 | 161151 | -4 |
| Average | 23.25 | 579924 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.25 hedge funds with bullish positions and the average amount invested in these stocks was $580 million. That figure was $442 million in AL’s case. Ashland Global Holdings Inc.. (NYSE:ASH) is the most popular stock in this table. On the other hand ADT Inc. (NYSE:ADT) is the least popular one with only 16 bullish hedge fund positions. Air Lease Corp (NYSE:AL) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on AL as the stock returned 11% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
