The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Albemarle Corporation (NYSE:ALB) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Albemarle Corporation (NYSE:ALB) has experienced an increase in support from the world’s most elite money managers of late. Albemarle Corporation (NYSE:ALB) was in 38 hedge funds’ portfolios at the end of September. The all time high for this statistic is 40. There were 28 hedge funds in our database with ALB positions at the end of the second quarter. Our calculations also showed that ALB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Now let’s review the new hedge fund action surrounding Albemarle Corporation (NYSE:ALB).
Ray Dalio of Bridgewater Associates
Do Hedge Funds Think ALB Is A Good Stock To Buy Now?
At third quarter’s end, a total of 38 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 36% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ALB over the last 25 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
Among these funds, Citadel Investment Group held the most valuable stake in Albemarle Corporation (NYSE:ALB), which was worth $61.8 million at the end of the third quarter. On the second spot was PEAK6 Capital Management which amassed $52 million worth of shares. Himension Capital, Bridgewater Associates, and Renaissance Technologies 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 Quaero Capital allocated the biggest weight to Albemarle Corporation (NYSE:ALB), around 5.67% of its 13F portfolio. Albar Capital is also relatively very bullish on the stock, designating 3.79 percent of its 13F equity portfolio to ALB.
As aggregate interest increased, specific money managers have jumped into Albemarle Corporation (NYSE:ALB) headfirst. Himension Capital, managed by Jay Chen, initiated the biggest position in Albemarle Corporation (NYSE:ALB). Himension Capital had $46.5 million invested in the company at the end of the quarter. Jos Shaver’s Electron Capital Partners also initiated a $24.3 million position during the quarter. The other funds with brand new ALB positions are Ken Griffin’s Citadel Investment Group, Larry Chen and Terry Zhang’s Tairen Capital, and Javier Velazquez’s Albar Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Albemarle Corporation (NYSE:ALB). These stocks are ViacomCBS Inc. (NASDAQ:VIAC), Canon Inc. (NYSE:CAJ), Carvana Co. (NYSE:CVNA), Gartner Inc (NYSE:IT), United Rentals, Inc. (NYSE:URI), ZTO Express (Cayman) Inc. (NYSE:ZTO), and Bilibili Inc. (NASDAQ:BILI). This group of stocks’ market caps are similar to ALB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VIAC | 64 | 1254114 | -7 |
| CAJ | 8 | 64340 | 0 |
| CVNA | 58 | 8309496 | -5 |
| IT | 33 | 2039924 | -6 |
| URI | 37 | 1382415 | -10 |
| ZTO | 20 | 1019859 | -1 |
| BILI | 35 | 1509730 | -12 |
| Average | 36.4 | 2225697 | -5.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 36.4 hedge funds with bullish positions and the average amount invested in these stocks was $2226 million. That figure was $318 million in ALB’s case. ViacomCBS Inc. (NASDAQ:VIAC) is the most popular stock in this table. On the other hand Canon Inc. (NYSE:CAJ) is the least popular one with only 8 bullish hedge fund positions. Albemarle Corporation (NYSE:ALB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ALB is 65.3. 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. 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 29.6% in 2021 and still managed to beat the market by another 3.6 percentage points. Hedge funds were somewhat right about betting on ALB as the stock returned 1% since the end of September (through January 31st) and outperformed the top 5 hedge fund stocks but not the market. This is a rare phenomenon as top hedge fund stocks usually beat the market over the long-term.
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Disclosure: None. This article was originally published at Insider Monkey.
