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Is Albany International Corp. (AIN) Going to Burn These Hedge Funds?

Is Albany International Corp. (NYSE:AIN) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Albany International Corp. (NYSE:AIN) has seen an increase in enthusiasm from smart money in recent months. Our calculations also showed that AIN isn’t among the 30 most popular stocks among hedge funds.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 market by 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

CITADEL INVESTMENT GROUP

We’re going to analyze the recent hedge fund action encompassing Albany International Corp. (NYSE:AIN).

What does the smart money think about Albany International Corp. (NYSE:AIN)?

At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 86% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards AIN over the last 13 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds With AIN Positions

The largest stake in Albany International Corp. (NYSE:AIN) was held by Renaissance Technologies, which reported holding $51.9 million worth of stock at the end of September. It was followed by Millennium Management with a $17.1 million position. Other investors bullish on the company included Marshall Wace LLP, GAMCO Investors, and Citadel Investment Group.

As industrywide interest jumped, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, initiated the largest position in Albany International Corp. (NYSE:AIN). Millennium Management had $17.1 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $8.5 million position during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Joel Greenblatt’s Gotham Asset Management.

Let’s also examine hedge fund activity in other stocks similar to Albany International Corp. (NYSE:AIN). These stocks are Realogy Holdings Corp (NYSE:RLGY), WNS (Holdings) Limited (NYSE:WNS), Avis Budget Group Inc. (NASDAQ:CAR), and Dorman Products Inc. (NASDAQ:DORM). This group of stocks’ market values are closest to AIN’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RLGY 23 722694 4
WNS 14 178577 -3
CAR 29 809940 2
DORM 11 72254 1
Average 19.25 445866 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.25 hedge funds with bullish positions and the average amount invested in these stocks was $446 million. That figure was $92 million in AIN’s case. Avis Budget Group Inc. (NASDAQ:CAR) is the most popular stock in this table. On the other hand Dorman Products Inc. (NASDAQ:DORM) is the least popular one with only 11 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CAR might be a better candidate to consider a long position.

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

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