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 September 30. In this article we look at what those investors think of A. O. Smith Corporation (NYSE:AOS).
Hedge fund interest in A. O. Smith Corporation (NYSE:AOS) shares was flat during the latest quarter. This is usually a negative indicator. At the end of this article we will also compare AOS to other stocks including Broadridge Financial Solutions, Inc. (NYSE:BR), Camden Property Trust (NYSE:CPT), and Alexandria Real Estate Equities Inc (NYSE:ARE) to get a better sense of its popularity.
Follow Smith A O Corp (NYSE:AOS)
Follow Smith A O Corp (NYSE:AOS)
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How are hedge funds trading A. O. Smith Corporation (NYSE:AOS)?
Heading into the fourth quarter of 2016, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from the previous quarter. The flat showing followed a quarter in which hedge fund ownership fell sharply, by nearly 30%. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Cliff Asness’ AQR Capital Management has the biggest position in A. O. Smith Corporation (NYSE:AOS), worth close to $143.1 million. The second largest stake is held by Impax Asset Management, led by Ian Simm, holding a $66.8 million position; the fund has 3.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions comprise John Overdeck and David Siegel’s Two Sigma Advisors, Bernard Lambilliotte’s Ecofin Ltd and Chuck Royce’s Royce & Associates.
Since A. O. Smith Corporation (NYSE:AOS) has witnessed bearish sentiment from the smart money, it’s easy to see that there was a specific group of funds who sold off their full holdings by the end of the third quarter. It’s worth mentioning that Gregg Moskowitz’s Interval Partners sold off the largest investment of the “upper crust” of funds tracked by Insider Monkey, valued at about $8.2 million in stock. Jim Simons’ fund, Renaissance Technologies, also sold off its stock, about $8 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as A. O. Smith Corporation (NYSE:AOS) but similarly valued. These stocks are Broadridge Financial Solutions, Inc. (NYSE:BR), Camden Property Trust (NYSE:CPT), Alexandria Real Estate Equities Inc (NYSE:ARE), and Tiffany & Co. (NYSE:TIF). All of these stocks’ market caps are closest to AOS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BR | 21 | 207829 | 6 |
| CPT | 8 | 149422 | -2 |
| ARE | 11 | 54049 | 0 |
| TIF | 33 | 497053 | 7 |
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $227 million. That figure was $352 million in AOS’s case. Tiffany & Co. (NYSE:TIF) is the most popular stock in this table. On the other hand Camden Property Trust (NYSE:CPT) is the least popular one with only 8 bullish hedge fund positions. A. O. Smith Corporation (NYSE:AOS) 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 TIF might be a better candidate to consider a long position in.
Disclosure: None
