The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 873 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 June 30th. In this article we look at what those investors think of Altria Group Inc (NYSE:MO).
Is Altria Group Inc (NYSE:MO) a bargain? The best stock pickers were becoming hopeful. The number of long hedge fund bets improved by 9 in recent months. Altria Group Inc (NYSE:MO) was in 47 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 54. Our calculations also showed that MO isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 38 hedge funds in our database with MO holdings at the end of March.
If you’d ask most market participants, hedge funds are perceived as underperforming, old investment tools of years past. While there are greater than 8000 funds in operation at the moment, We hone in on the moguls of this group, around 850 funds. It is estimated that this group of investors handle the majority of the smart money’s total asset base, and by observing their matchless investments, Insider Monkey has deciphered a number of investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Blair Levinsky of Waratah Capital Advisors
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Do Hedge Funds Think MO Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 47 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 24% from the previous quarter. By comparison, 43 hedge funds held shares or bullish call options in MO a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Arrowstreet Capital was the largest shareholder of Altria Group Inc (NYSE:MO), with a stake worth $165.1 million reported as of the end of June. Trailing Arrowstreet Capital was D E Shaw, which amassed a stake valued at $156.6 million. Renaissance Technologies, Citadel Investment Group, and Citadel Investment Group 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 Plaisance Capital allocated the biggest weight to Altria Group Inc (NYSE:MO), around 3.8% of its 13F portfolio. Callodine Capital Management is also relatively very bullish on the stock, earmarking 3.34 percent of its 13F equity portfolio to MO.
Consequently, key hedge funds have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, created the largest call position in Altria Group Inc (NYSE:MO). Citadel Investment Group had $102.3 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also made a $21.5 million investment in the stock during the quarter. The following funds were also among the new MO investors: John Overdeck and David Siegel’s Two Sigma Advisors, D. E. Shaw’s D E Shaw, and Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Altria Group Inc (NYSE:MO) but similarly valued. These stocks are Fidelity National Information Services Inc. (NYSE:FIS), Mondelez International Inc (NASDAQ:MDLZ), NIO Inc. (NYSE:NIO), Gilead Sciences, Inc. (NASDAQ:GILD), General Motors Company (NYSE:GM), U.S. Bancorp (NYSE:USB), and Automatic Data Processing, Inc. (NASDAQ:ADP). This group of stocks’ market valuations resemble MO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FIS | 72 | 7369909 | -2 |
| MDLZ | 53 | 2946868 | 8 |
| NIO | 34 | 2066911 | 6 |
| GILD | 54 | 1732734 | -11 |
| GM | 86 | 7414862 | 0 |
| USB | 41 | 8305634 | -2 |
| ADP | 41 | 3018791 | -1 |
| Average | 54.4 | 4693673 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 54.4 hedge funds with bullish positions and the average amount invested in these stocks was $4694 million. That figure was $949 million in MO’s case. General Motors Company (NYSE:GM) is the most popular stock in this table. On the other hand NIO Inc. (NYSE:NIO) is the least popular one with only 34 bullish hedge fund positions. Altria Group Inc (NYSE:MO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MO is 48.6. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 22.9% in 2021 through October 1st and surpassed the market again by 5.6 percentage points. Unfortunately MO wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); MO investors were disappointed as the stock returned -2.1% since the end of June (through 10/1) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Altria Group Inc. (NYSE:MO)
Follow Altria Group Inc. (NYSE:MO)
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Disclosure: None. This article was originally published at Insider Monkey.
