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 Alaska Air Group, Inc. (NYSE:ALK) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Alaska Air Group, Inc. (NYSE:ALK) was in 41 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 42. ALK has seen an increase in hedge fund interest lately. There were 38 hedge funds in our database with ALK positions at the end of the second quarter. Our calculations also showed that ALK 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. Keeping this in mind we’re going to take a peek at the latest hedge fund action surrounding Alaska Air Group, Inc. (NYSE:ALK).
Paul Reeder of PAR Capital Management
Do Hedge Funds Think ALK Is A Good Stock To Buy Now?
At Q3’s end, a total of 41 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from the previous quarter. On the other hand, there were a total of 34 hedge funds with a bullish position in ALK a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, PAR Capital Management held the most valuable stake in Alaska Air Group, Inc. (NYSE:ALK), which was worth $94.2 million at the end of the third quarter. On the second spot was Millennium Management which amassed $89.4 million worth of shares. Citadel Investment Group, Holocene Advisors, 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 1060 Capital Management allocated the biggest weight to Alaska Air Group, Inc. (NYSE:ALK), around 7.74% of its 13F portfolio. Jade Capital Advisors is also relatively very bullish on the stock, earmarking 2.57 percent of its 13F equity portfolio to ALK.
Now, specific money managers were leading the bulls’ herd. Holocene Advisors, managed by Brandon Haley, initiated the biggest position in Alaska Air Group, Inc. (NYSE:ALK). Holocene Advisors had $54.5 million invested in the company at the end of the quarter. Jack Woodruff’s Candlestick Capital Management also initiated a $37.1 million position during the quarter. The other funds with new positions in the stock are Jack Woodruff’s Candlestick Capital Management, Michael Gelband’s ExodusPoint Capital, and Gregg Moskowitz’s Interval Partners.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Alaska Air Group, Inc. (NYSE:ALK) but similarly valued. These stocks are PVH Corp (NYSE:PVH), Pearson PLC (NYSE:PSO), Chemed Corporation (NYSE:CHE), Legend Biotech Corporation (NASDAQ:LEGN), OneMain Holdings Inc (NYSE:OMF), Plains All American Pipeline, L.P. (NASDAQ:PAA), and Companhia Siderurgica Nacional (NYSE:SID). This group of stocks’ market values match ALK’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PVH | 38 | 2157407 | 10 |
| PSO | 8 | 15064 | 1 |
| CHE | 20 | 272040 | -10 |
| LEGN | 14 | 947002 | -5 |
| OMF | 41 | 1047061 | 0 |
| PAA | 7 | 51655 | 0 |
| SID | 11 | 46539 | -1 |
| Average | 19.9 | 648110 | -0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.9 hedge funds with bullish positions and the average amount invested in these stocks was $648 million. That figure was $648 million in ALK’s case. OneMain Holdings Inc (NYSE:OMF) is the most popular stock in this table. On the other hand Plains All American Pipeline, L.P. (NASDAQ:PAA) is the least popular one with only 7 bullish hedge fund positions. Alaska Air Group, Inc. (NYSE:ALK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ALK is 87.3. 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. This is a slightly positive signal but 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, ALK wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ALK were disappointed as the stock returned -6.6% since the end of September (through 1/31) 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 all of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
