Is Ally Financial Inc (NYSE:ALLY) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to find the latest market-moving information.
Is Ally Financial Inc (NYSE:ALLY) a buy, sell, or hold? Prominent investors are taking a bullish view. The number of bullish hedge fund bets advanced by 1 recently. 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 CMS Energy Corporation (NYSE:CMS), Coty Inc (NYSE:COTY), and Vipshop Holdings Ltd – ADR (NYSE:VIPS) to gather more data points.
Now, let’s take a peek at the latest action regarding Ally Financial Inc (NYSE:ALLY).
Hedge fund activity in Ally Financial Inc (NYSE:ALLY)
At the end of the third quarter, a total of 57 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 2% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Stephen Feinberg’s Cerberus Capital Management has the largest position in Ally Financial Inc (NYSE:ALLY), worth close to $846.1 million, accounting for 70.2% of its total 13F portfolio. The second most bullish fund manager is Richard Perry of Perry Capital, with a $460.7 million position; 18.2% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that hold long positions consist of Emanuel J. Friedman’s EJF Capital, Joshua Friedman and Mitchell Julis’s Canyon Capital Advisors and Howard Marks’s Oaktree Capital Management.
Consequently, specific money managers have jumped into Ally Financial Inc (NYSE:ALLY) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the largest position in Ally Financial Inc (NYSE:ALLY). Balyasny Asset Management had $42.8 million invested in the company at the end of the quarter. Robert Pohly’s Samlyn Capital also made a $40.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Tom Sandell’s Sandell Asset Management, Matthew Hulsizer’s PEAK6 Capital Management, and Benjamin A. Smith’s Laurion Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Ally Financial Inc (NYSE:ALLY) but similarly valued. These stocks are CMS Energy Corporation (NYSE:CMS), Coty Inc (NYSE:COTY), Vipshop Holdings Ltd – ADR (NYSE:VIPS), and Waters Corporation (NYSE:WAT). This group of stocks’ market caps are similar to ALLY’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 27.25 hedge funds with bullish positions and the average amount invested in these stocks was $638 million. That figure was $3532 million in ALLY’s case. Vipshop Holdings Ltd – ADR (NYSE:VIPS) is the most popular stock in this table. On the other hand CMS Energy Corporation (NYSE:CMS) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Ally Financial Inc (NYSE:ALLY) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.