General Electric Company (NYSE:GE) won a large order today, with South Korea awarding the company a contract worth as much as $3.5 billion to supply engines for the nation’s KF-X fighter jet program. General Electric beat out a European consortium of companies to win the order by scoring better results in the four main categories of technology, management, cost, and localization. South Korea intends to localize the production of the parts of the engine by 2022. The deal could be signed next month. The market hasn’t jumped out of its shoes upon hearing of the deal, as GE shares are actually down very slightly this morning.
Is General Electric Company (NYSE:GE) a good investment now? The smart money is buying. The number of long hedge fund positions increased by 10 in the first quarter. GE was in 64 hedge funds’ portfolios at the end of the first quarter of 2016. There were 54 hedge funds in our database with GE holdings at the end of the fourth quarter. At the end of this article we will also compare GE to other stocks including Amazon.com, Inc. (NASDAQ:AMZN), Wells Fargo & Co (NYSE:WFC), and AT&T Inc. (NYSE:T) to get a better sense of its popularity.
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Of the funds tracked by Insider Monkey, Nelson Peltz’s Trian Partners has the number one position in General Electric Company (NYSE:GE), worth close to $2.36 billion, amounting to 22.7% of its total 13F portfolio. Coming in second is Fisher Asset Management, managed by Ken Fisher, which holds a $966.7 million position; 1.8% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions contain Warren Buffett’s Berkshire Hathaway, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, and Phill Gross and Robert Atchinson’s Adage Capital Management.
On the next page we’ll look at some funds that took up positions in GE during Q1, as well as compare the stock to a handful of others with similar market caps.
As industrywide interest jumped, specific money managers have jumped into General Electric Company (NYSE:GE) headfirst. Overland Advisors, managed by Gordy Holterman and Derek Dunn, initiated the largest call position in General Electric Company (NYSE:GE). Overland Advisors had $25.4 million invested in the company at the end of the quarter. Eric Sprott’s Sprott Asset Management also initiated a $13.2 million position during the quarter. The following funds were also among the new GE investors: Ken Griffin’s Citadel Investment Group, Jonathan Barrett and Paul Segal’s Luminus Management, and Charles Davidson’s Wexford Capital.
Let’s go over hedge fund activity in other stocks similar to General Electric Company (NYSE:GE). These stocks are Amazon.com, Inc. (NASDAQ:AMZN), Wells Fargo & Co (NYSE:WFC), AT&T Inc. (NYSE:T), and China Mobile Ltd. (ADR) (NYSE:CHL). All of these stocks’ market caps are similar to GE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMZN | 133 | 14699954 | -8 |
| WFC | 90 | 29758121 | 5 |
| T | 51 | 3205164 | 3 |
| CHL | 25 | 396728 | 1 |
As you can see these stocks had an average of 75 hedge funds with bullish positions and the average amount invested in these stocks was $12.02 billion. That figure was $5.48 billion in GE’s case. Amazon.com, Inc. (NASDAQ:AMZN) is the most popular stock in this table. On the other hand China Mobile Ltd. (ADR) (NYSE:CHL) is the least popular one with only 25 bullish hedge fund positions. General Electric Company (NYSE:GE) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AMZN might be a better candidate to consider a long position.
Disclosure: None
