Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards APi Group Corporation (NYSE:APG) changed recently.
APi Group Corporation (NYSE:APG) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 34 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that APG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare APG to other stocks including Agree Realty Corporation (NYSE:ADC), Armstrong World Industries, Inc. (NYSE:AWI), and Selective Insurance Group (NASDAQ:SIGI) to get a better sense of its popularity.
Dmitry Balyasny of Balyasny Asset Management
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. With all of this in mind let’s check out the key hedge fund action regarding APi Group Corporation (NYSE:APG).
Do Hedge Funds Think APG Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 28 hedge funds with a bullish position in APG 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, Viking Global held the most valuable stake in APi Group Corporation (NYSE:APG), which was worth $678.3 million at the end of the third quarter. On the second spot was Empyrean Capital Partners which amassed $103.7 million worth of shares. Permian Investment Partners, Senator Investment Group, and ADW Capital 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 ADW Capital allocated the biggest weight to APi Group Corporation (NYSE:APG), around 19.45% of its 13F portfolio. Lionstone Capital Management is also relatively very bullish on the stock, designating 10.79 percent of its 13F equity portfolio to APG.
Because APi Group Corporation (NYSE:APG) has experienced a decline in interest from hedge fund managers, logic holds that there was a specific group of hedge funds that elected to cut their entire stakes in the third quarter. Intriguingly, Renaissance Technologies said goodbye to the largest position of the “upper crust” of funds followed by Insider Monkey, totaling about $8.6 million in stock, and David Einhorn’s Greenlight Capital was right behind this move, as the fund dumped about $5.2 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks similar to APi Group Corporation (NYSE:APG). These stocks are Agree Realty Corporation (NYSE:ADC), Armstrong World Industries, Inc. (NYSE:AWI), Selective Insurance Group (NASDAQ:SIGI), RLI Corp. (NYSE:RLI), Park Hotels & Resorts Inc. (NYSE:PK), Q2 Holdings Inc (NYSE:QTWO), and Flowserve Corporation (NYSE:FLS). All of these stocks’ market caps match APG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ADC | 20 | 155884 | 2 |
| AWI | 22 | 480178 | 5 |
| SIGI | 14 | 27641 | 0 |
| RLI | 18 | 192378 | 3 |
| PK | 22 | 201657 | 3 |
| QTWO | 20 | 178149 | 1 |
| FLS | 21 | 199851 | -6 |
| Average | 19.6 | 205105 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.6 hedge funds with bullish positions and the average amount invested in these stocks was $205 million. That figure was $1332 million in APG’s case. Armstrong World Industries, Inc. (NYSE:AWI) is the most popular stock in this table. On the other hand Selective Insurance Group (NASDAQ:SIGI) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks APi Group Corporation (NYSE:APG) is more popular among hedge funds. Our overall hedge fund sentiment score for APG is 85. 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. 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 returned 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on APG as the stock returned 14.5% since the end of September (through 11/30) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Follow Api Group Corp (NYSE:APG)
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Disclosure: None. This article was originally published at Insider Monkey.
