Should You Buy Asbury Automotive Group, Inc. (ABG)?

Is Asbury Automotive Group, Inc. (NYSE:ABG) 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.

Asbury Automotive Group, Inc. (NYSE:ABG) investors should pay attention to an increase in activity from the world’s largest hedge funds in recent months. Our calculations also showed that ABG isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

David Abrams

Let’s take a look at the latest hedge fund action regarding Asbury Automotive Group, Inc. (NYSE:ABG).

What does the smart money think about Asbury Automotive Group, Inc. (NYSE:ABG)?

At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ABG over the last 13 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).


More specifically, Abrams Capital Management was the largest shareholder of Asbury Automotive Group, Inc. (NYSE:ABG), with a stake worth $109 million reported as of the end of September. Trailing Abrams Capital Management was Eminence Capital, which amassed a stake valued at $63.5 million. GLG Partners, Gotham Asset Management, and AQR Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.

Now, key money managers have jumped into Asbury Automotive Group, Inc. (NYSE:ABG) headfirst. Point72 Asset Management, managed by Steve Cohen, initiated the largest position in Asbury Automotive Group, Inc. (NYSE:ABG). Point72 Asset Management had $3.1 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also made a $0.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group and Dmitry Balyasny’s Balyasny Asset Management.

Let’s now take a look at hedge fund activity in other stocks similar to Asbury Automotive Group, Inc. (NYSE:ABG). These stocks are Cheetah Mobile Inc (NYSE:CMCM), Loral Space & Communications Ltd. (NASDAQ:LORL), Noble Midstream Partners LP (NYSE:NBLX), and Pretium Resources Inc (NYSE:PVG). This group of stocks’ market caps are closest to ABG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CMCM 7 4083 1
LORL 22 700633 -3
NBLX 6 30203 2
PVG 17 96787 2
Average 13 207927 0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $208 million. That figure was $213 million in ABG’s case. Loral Space & Communications Ltd. (NASDAQ:LORL) is the most popular stock in this table. On the other hand Noble Midstream Partners LP (NYSE:NBLX) is the least popular one with only 6 bullish hedge fund positions. Asbury Automotive Group, Inc. (NYSE:ABG) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LORL might be a better candidate to consider a long position.

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