Smart Money Is Losing Confidence in AutoZone, Inc. (AZO)

Because AutoZone, Inc. (NYSE:AZO) has witnessed a decline in interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of hedgies who sold off their positions entirely by the end of the third quarter. Intriguingly, Anand Parekh’s Alyeska Investment Group dropped the biggest stake of the 700 funds watched by Insider Monkey, comprising about $43.4 million in call options, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund cut about $43.2 million worth of shares. These moves are important to note, as aggregate hedge fund interest fell by 2 funds by the end of the third quarter.

Let’s now review hedge fund activity in other stocks similar to AutoZone, Inc. (NYSE:AZO). We will take a look at Telefonica Brasil SA (ADR) (NYSE:VIV), Electronic Arts Inc. (NASDAQ:EA), Koninklijke Philips Electronics NV (ADR) (NYSE:PHG), and Xcel Energy Inc (NYSE:XEL). This group of stocks’ market caps are similar to AZO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
VIV 11 158140 1
EA 61 3011540 3
PHG 10 200236 -4
XEL 14 433249 0

As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $951 million. That figure was $1.30 billion in AZO’s case. Electronic Arts Inc. (NASDAQ:EA) is the most popular stock in this table. On the other hand Koninklijke Philips Electronics NV (ADR) (NYSE:PHG) is the least popular one with only 10 bullish hedge fund positions. AutoZone, Inc. (NYSE:AZO) 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 EA might be a better candidate to consider a long position in.

Disclosure: None