Allison Transmission Holdings Inc (ALSN): Are Hedge Funds Right About This Stock?

Is Allison Transmission Holdings Inc (NYSE:ALSN) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from industry insiders. They fail miserably sometimes but historically their consensus stock picks outperformed the market after adjusting for known risk factors.

Is Allison Transmission Holdings Inc (NYSE:ALSN) the right investment to pursue these days? Money managers are in a bullish mood. The number of long hedge fund bets inched up by 4 recently. At the end of this article we will also compare ALSN to other stocks including Grupo Aeroportuario del Sureste (ADR) (NYSE:ASR), PacWest Bancorp (NASDAQ:PACW), and Burlington Stores Inc (NYSE:BURL) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

chungking/Shutterstock.com

Now, let’s take a look at the key action encompassing Allison Transmission Holdings Inc (NYSE:ALSN).

Hedge fund activity in Allison Transmission Holdings Inc (NYSE:ALSN)

At Q3’s end, a total of 38 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 12% from the second quarter of 2016. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jeffrey Ubben of ValueAct Capital holds the biggest position in Allison Transmission Holdings Inc (NYSE:ALSN). The fund has a $548.5 million position in the stock, comprising 4.8% of its 13F portfolio. Sitting at the No. 2 spot is Ashe Capital, managed by William Crowley, William Harker, and Stephen Blass, which holds a $287.7 million position; the fund has 30.2% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism comprise James A. Star’s Longview Asset Management, Lou Simpson’s SQ Advisors and D E Shaw which is one of the biggest hedge funds in the world .