Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of American Airlines Group Inc (NASDAQ:AAL).
American Airlines Group Inc (NASDAQ:AAL) has seen a decrease in hedge fund sentiment in recent months. American Airlines Group Inc (NASDAQ:AAL) was in 32 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 77. There were 37 hedge funds in our database with AAL positions at the end of the fourth quarter. Our calculations also showed that AAL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
If you’d ask most market participants, hedge funds are perceived as slow, old investment vehicles of the past. While there are over 8000 funds in operation at the moment, Our researchers choose to focus on the masters of this club, approximately 850 funds. Most estimates calculate that this group of people manage the lion’s share of the hedge fund industry’s total asset base, and by tailing their inimitable picks, Insider Monkey has uncovered several investment strategies that have historically outpaced the broader indices. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Paul Reeder of PAR Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now we’re going to go over the new hedge fund action regarding American Airlines Group Inc (NASDAQ:AAL).
Do Hedge Funds Think AAL Is A Good Stock To Buy Now?
At first quarter’s end, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from one quarter earlier. By comparison, 36 hedge funds held shares or bullish call options in AAL a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Citadel Investment Group was the largest shareholder of American Airlines Group Inc (NASDAQ:AAL), with a stake worth $160 million reported as of the end of March. Trailing Citadel Investment Group was Alkeon Capital Management, which amassed a stake valued at $155.4 million. Citadel Investment Group, Millennium Management, and PAR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Ovata Capital Management allocated the biggest weight to American Airlines Group Inc (NASDAQ:AAL), around 5.35% of its 13F portfolio. Greenhouse Funds is also relatively very bullish on the stock, designating 2.05 percent of its 13F equity portfolio to AAL.
Seeing as American Airlines Group Inc (NASDAQ:AAL) has experienced falling interest from hedge fund managers, it’s safe to say that there is a sect of funds who sold off their full holdings last quarter. At the top of the heap, Robert Henry Lynch’s Aristeia Capital dropped the largest investment of the 750 funds tracked by Insider Monkey, totaling close to $46.6 million in stock. Highbridge Capital Management, also dropped its stock, about $41 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 5 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to American Airlines Group Inc (NASDAQ:AAL). We will take a look at Teledyne Technologies Incorporated (NYSE:TDY), GoodRx Holdings, Inc. (NASDAQ:GDRX), Avery Dennison Corporation (NYSE:AVY), Campbell Soup Company (NYSE:CPB), PagSeguro Digital Ltd. (NYSE:PAGS), Cenovus Energy Inc (NYSE:CVE), and VICI Properties Inc. (NYSE:VICI). This group of stocks’ market caps match AAL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TDY | 31 | 827471 | 3 |
| GDRX | 24 | 488114 | -8 |
| AVY | 20 | 300350 | -3 |
| CPB | 28 | 345398 | -1 |
| PAGS | 33 | 1804603 | 8 |
| CVE | 23 | 379693 | 0 |
| VICI | 41 | 875487 | 3 |
| Average | 28.6 | 717302 | 0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.6 hedge funds with bullish positions and the average amount invested in these stocks was $717 million. That figure was $562 million in AAL’s case. VICI Properties Inc. (NYSE:VICI) is the most popular stock in this table. On the other hand Avery Dennison Corporation (NYSE:AVY) is the least popular one with only 20 bullish hedge fund positions. American Airlines Group Inc (NASDAQ:AAL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AAL is 41. 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 positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately AAL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on AAL were disappointed as the stock returned -10.1% since the end of March (through 7/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow American Airlines Group Inc. (NASDAQ:AAL)
Follow American Airlines Group Inc. (NASDAQ:AAL)
Suggested Articles:
- How to Best Use Insider Monkey To Increase Your Returns
- 10 Largest Agricultural Companies
- 10 Best Precious Metals Stocks To Buy
Disclosure: None. This article was originally published at Insider Monkey.
