Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of Alamo Group, Inc. (NYSE:ALG) based on that data.
Alamo Group, Inc. (NYSE:ALG) investors should be aware of a decrease in the activity from the world’s largest hedge funds lately. The stock lost 14% in the third quarter, after having gained 12% in the first six months of the year, so investors are either becoming less optimistic or sold the stock for profit-taking reasons. Among the funds we follow, ALG was in 7 hedge funds’ portfolios at the end of September, compared to 9 funds a quarter earlier.
In addition, at the end of this article we will also compare ALG to other stocks, including CoBiz Financial Inc (NASDAQ:COBZ), Frontline Ltd (NYSE:FRO), and The Marcus Corporation (NYSE:MCS) to get a better sense of its popularity.
Follow Alamo Group Inc (NYSE:ALG)
Follow Alamo Group Inc (NYSE:ALG)
In the 21st century investor’s toolkit there are several gauges stock market investors put to use to analyze their stock investments. A pair of the most useful gauges are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the top investment managers can beat the S&P 500 by a solid margin (see the details here).
Keeping this in mind, we’re going to check out the key action regarding Alamo Group, Inc. (NYSE:ALG).
What does the smart money think about Alamo Group, Inc. (NYSE:ALG)?
Among the seven funds that were bullish on the stock in the third quarter, James A. Star’s Longview Asset Management has the number one position in Alamo Group, Inc. (NYSE:ALG), worth close to $79.5 million, comprising 1.7% of its total 13F portfolio. On Longview Asset Management’s heels is Chuck Royce’s Royce & Associates, with a $55.3 million position; 0.3% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include Martin Whitman’s Third Avenue Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Cliff Asness’s AQR Capital Management.
Since Alamo Group, Inc. (NYSE:ALG) has witnessed falling interest from the smart money, we can see that there lies a certain “tier” of hedgies that elected to cut their positions entirely heading into Q4. It’s worth mentioning that Israel Englander’s Millennium Management sold off the biggest investment of the “upper crust” of funds tracked by Insider Monkey, totaling an estimated $0.8 million in stock, and Roger Ibbotson’s Zebra Capital Management was right behind this move, as the fund cut about $0.5 million worth of shares. These moves are important to note, as aggregate hedge fund interest fell by 2 funds heading into Q4.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Alamo Group, Inc. (NYSE:ALG) but similarly valued. These stocks are CoBiz Financial Inc (NASDAQ:COBZ), Frontline Ltd (NYSE:FRO), The Marcus Corporation (NYSE:MCS), and Haverty Furniture Companies, Inc. (NYSE:HVT). All of these stocks’ market caps match ALG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| COBZ | 6 | 9002 | -1 |
| FRO | 14 | 15758 | 0 |
| MCS | 12 | 49694 | 1 |
| HVT | 12 | 73201 | 1 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $37 million, which is lower than the $145 million in ALG’s case. Frontline Ltd (NYSE:FRO) is the most popular stock in this table, while CoBiz Financial Inc (NASDAQ:COBZ) is the least popular one with only 6 bullish hedge fund positions. Alamo Group, Inc. (NYSE:ALG) is not the least popular stock in this group, but hedge fund interest is significantly lower 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 FRO might be a better candidate to consider a long position.
