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Were Hedge Funds Right About Flocking Into Ardagh Group S.A. (ARD) ?

We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article we look at what those investors think of Ardagh Group S.A. (NYSE:ARD).

Ardagh Group S.A. (NYSE:ARD) was in 10 hedge funds’ portfolios at the end of December. ARD has seen an increase in activity from the world’s largest hedge funds recently. There were 8 hedge funds in our database with ARD positions at the end of the previous quarter. Our calculations also showed that ard 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 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 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.

Clint Carlson, Carlson Capital

Let’s review the new hedge fund action encompassing Ardagh Group S.A. (NYSE:ARD).

What does the smart money think about Ardagh Group S.A. (NYSE:ARD)?

Heading into the first quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards ARD over the last 14 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with ARD Positions

More specifically, Canyon Capital Advisors was the largest shareholder of Ardagh Group S.A. (NYSE:ARD), with a stake worth $29.5 million reported as of the end of September. Trailing Canyon Capital Advisors was Millennium Management, which amassed a stake valued at $2.7 million. Renaissance Technologies, Carlson Capital, and Marshall Wace LLP were also very fond of the stock, giving the stock large weights in their portfolios.

As industrywide interest jumped, key money managers have jumped into Ardagh Group S.A. (NYSE:ARD) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the biggest position in Ardagh Group S.A. (NYSE:ARD). Marshall Wace LLP had $1.7 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $0.4 million position during the quarter. The only other fund with a brand new ARD position is Peter Muller’s PDT Partners.

Let’s also examine hedge fund activity in other stocks similar to Ardagh Group S.A. (NYSE:ARD). These stocks are Chemical Financial Corporation (NASDAQ:CHFC), Silgan Holdings Inc. (NASDAQ:SLGN), BancorpSouth Bank (NYSE:BXS), and Vishay Intertechnology, Inc. (NYSE:VSH). This group of stocks’ market values are closest to ARD’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CHFC 10 36182 2
SLGN 14 108007 2
BXS 9 54741 2
VSH 19 333325 -3
Average 13 133064 0.75

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 $133 million. That figure was $42 million in ARD’s case. Vishay Intertechnology, Inc. (NYSE:VSH) is the most popular stock in this table. On the other hand BancorpSouth Bank (NYSE:BXS) is the least popular one with only 9 bullish hedge fund positions. Ardagh Group S.A. (NYSE:ARD) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on ARD as the stock returned 26.8% and outperformed the market by an even larger margin.

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

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