At Insider Monkey, we pore over the filings of nearly 867 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30th. In this article, we will use that wealth of knowledge to determine whether or not AerCap Holdings N.V. (NYSE:AER) makes for a good investment right now.
AerCap Holdings N.V. (NYSE:AER) has experienced a decrease in hedge fund interest recently. AerCap Holdings N.V. (NYSE:AER) was in 42 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 77. Our calculations also showed that AER isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Matthew Lindenbaum of Basswood Capital
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 AerCap Holdings N.V. (NYSE:AER).
Do Hedge Funds Think AER Is A Good Stock To Buy Now?
At Q3’s end, a total of 42 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from the previous quarter. On the other hand, there were a total of 38 hedge funds with a bullish position in AER a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
The largest stake in AerCap Holdings N.V. (NYSE:AER) was held by Eagle Capital Management, which reported holding $382.5 million worth of stock at the end of September. It was followed by Lyrical Asset Management with a $267.6 million position. Other investors bullish on the company included Empyrean Capital Partners, Basswood Capital, and Monarch Alternative Capital. In terms of the portfolio weights assigned to each position Monarch Alternative Capital allocated the biggest weight to AerCap Holdings N.V. (NYSE:AER), around 24.86% of its 13F portfolio. Six Columns Capital is also relatively very bullish on the stock, earmarking 10.86 percent of its 13F equity portfolio to AER.
Due to the fact that AerCap Holdings N.V. (NYSE:AER) has witnessed bearish sentiment from the smart money, it’s easy to see that there is a sect of money managers who sold off their positions entirely last quarter. At the top of the heap, Julian Robertson’s Tiger Management cut the biggest investment of all the hedgies followed by Insider Monkey, comprising close to $40.9 million in stock. Suzi Nutton (CEO)’s fund, Lansdowne Partners, also cut its stock, about $39.5 million worth. These transactions are important to note, as total hedge fund interest dropped by 3 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as AerCap Holdings N.V. (NYSE:AER) but similarly valued. These stocks are Kilroy Realty Corp (NYSE:KRC), Apartment Income REIT Corp. (NYSE:AIRC), Lincoln Electric Holdings, Inc. (NASDAQ:LECO), Advanced Drainage Systems Inc. (NYSE:WMS), Brooks Automation, Inc. (NASDAQ:BRKS), Americold Realty Trust (NYSE:COLD), and National Retail Properties, Inc. (NYSE:NNN). This group of stocks’ market caps resemble AER’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KRC | 24 | 422839 | -2 |
| AIRC | 17 | 270935 | 3 |
| LECO | 21 | 288792 | 1 |
| WMS | 21 | 1092988 | -5 |
| BRKS | 29 | 577566 | -3 |
| COLD | 15 | 93728 | -1 |
| NNN | 21 | 120081 | 2 |
| Average | 21.1 | 409561 | -0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.1 hedge funds with bullish positions and the average amount invested in these stocks was $410 million. That figure was $1449 million in AER’s case. Brooks Automation, Inc. (NASDAQ:BRKS) is the most popular stock in this table. On the other hand Americold Realty Trust (NYSE:COLD) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks AerCap Holdings N.V. (NYSE:AER) is more popular among hedge funds. Our overall hedge fund sentiment score for AER is 68.4. 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 gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately AER wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on AER were disappointed as the stock returned -3.1% since the end of the third quarter (through 11/30) 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 since 2019.
Follow Aercap Holdings N.v. (NYSE:AER)
Follow Aercap Holdings N.v. (NYSE:AER)
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Disclosure: None. This article was originally published at Insider Monkey.
