Is Allstate (ALL) Stock A Buy or Sell?

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on December 31st. We at Insider Monkey have made an extensive database of more than 887 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded The Allstate Corporation (NYSE:ALL) based on those filings.

Is ALL stock a buy or sell? Hedge fund interest in The Allstate Corporation (NYSE:ALL) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that ALL isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as V.F. Corporation (NYSE:VFC), Okta, Inc. (NASDAQ:OKTA), and Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA) to gather more data points.

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 was 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).

Billionaire David Siegel's Top 10 Stock Picks

David Siegel of Two Sigma Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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. With all of this in mind we’re going to take a look at the latest hedge fund action regarding The Allstate Corporation (NYSE:ALL).

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

Heading into the first quarter of 2021, a total of 38 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ALL over the last 22 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the number one position in The Allstate Corporation (NYSE:ALL). AQR Capital Management has a $350 million position in the stock, comprising 0.6% of its 13F portfolio. The second most bullish fund manager is GLG Partners, managed by Noam Gottesman, which holds a $120.2 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions comprise John Overdeck and David Siegel’s Two Sigma Advisors, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Phill Gross and Robert Atchinson’s Adage Capital Management. In terms of the portfolio weights assigned to each position Full18 Capital allocated the biggest weight to The Allstate Corporation (NYSE:ALL), around 4.44% of its 13F portfolio. Prana Capital Management is also relatively very bullish on the stock, setting aside 3.77 percent of its 13F equity portfolio to ALL.

Judging by the fact that The Allstate Corporation (NYSE:ALL) has experienced bearish sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of hedge funds that elected to cut their entire stakes by the end of the fourth quarter. Intriguingly, Andreas Halvorsen’s Viking Global dropped the biggest investment of all the hedgies followed by Insider Monkey, valued at close to $77.4 million in stock, and Anand Parekh’s Alyeska Investment Group was right behind this move, as the fund cut about $9.5 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to The Allstate Corporation (NYSE:ALL). We will take a look at V.F. Corporation (NYSE:VFC), Okta, Inc. (NASDAQ:OKTA), Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA), O’Reilly Automotive Inc (NASDAQ:ORLY), Yum! Brands, Inc. (NYSE:YUM), Carrier Global Corporation (NYSE:CARR), and American International Group Inc (NYSE:AIG). This group of stocks’ market caps are similar to ALL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
VFC 31 760265 9
OKTA 61 2308732 10
BBVA 9 196955 -1
ORLY 49 2416443 -9
YUM 33 1199106 -9
CARR 52 2284818 3
AIG 41 2081359 3
Average 39.4 1606811 0.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 39.4 hedge funds with bullish positions and the average amount invested in these stocks was $1607 million. That figure was $838 million in ALL’s case. Okta, Inc. (NASDAQ:OKTA) 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 9 bullish hedge fund positions. The Allstate Corporation (NYSE:ALL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ALL is 56.6. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 surpassed the market again by 0.8 percentage points. Unfortunately ALL wasn’t nearly as popular as these 30 stocks (hedge fund sentiment was quite bearish); ALL investors were disappointed as the stock returned 3.8% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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