The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Alon USA Energy, Inc. (NYSE:ALJ).
Alon USA Energy, Inc. (NYSE:ALJ) has experienced a decrease in activity from the world’s largest hedge funds recently. More specifically, there were 15 hedge funds in our database with ALJ holdings at the end of the third quarter. At the end of this article we will also compare ALJ to other stocks including Natera Inc (NASDAQ:NTRA), John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS), and Middlesex Water Company (NASDAQ:MSEX) to get a better sense of its popularity.
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With all of this in mind, let’s take a look at the new action regarding Alon USA Energy, Inc. (NYSE:ALJ).
How are hedge funds trading Alon USA Energy, Inc. (NYSE:ALJ)?
At the end of September, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on Alon USA Energy, down by two funds over the quarter. Below, you can check out the change in hedge fund sentiment towards ALJ over the last five quarters. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Steve Cohen’s Point72 Asset Management has the number one position in Alon USA Energy, Inc. (NYSE:ALJ), worth close to $17.4 million, comprising 0.1% of its total 13F portfolio. On Point72 Asset Management’s heels is David E. Shaw’s D E Shaw holding a $15 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include Dmitry Balyasny’s Balyasny Asset Management, Ken Griffin’s Citadel Investment Group, and Richard Driehaus’ Driehaus Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually cut their positions entirely. At the top of the heap, Jacob Gottlieb’s Visium Asset Management cut the biggest stake of all the investors tracked by Insider Monkey, totaling close to $7.2 million in stock, and Daniel S. Och’s OZ Management was right behind this move, as the fund cut about $3.8 million worth of shares.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Alon USA Energy, Inc. (NYSE:ALJ) but similarly valued. These stocks are Natera Inc (NASDAQ:NTRA), John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS), Middlesex Water Company (NASDAQ:MSEX), and Encore Capital Group, Inc. (NASDAQ:ECPG). This group of stocks’ market values match ALJ’s market value.
|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 11 funds with bullish positions and the average amount invested in these stocks was $58 million. That figure was $58 million in ALJ’s case. Natera Inc (NASDAQ:NTRA) is the most popular stock in this table. On the other hand Encore Capital Group, Inc. (NASDAQ:ECPG) is the least popular one with only six funds holding shares. In Alon USA Energy, Inc. (NYSE:ALJ), the number of funds with long positions is the same as in Natera Inc (NASDAQ:NTRA)’s case. Given that the stock is more popular than the majority of companies in the table, it may be a good idea to analyze it in more detail and potentially include it in your portfolio.