The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Apollo Global Management LLC (NYSE:APO).
Apollo Global Management LLC (NYSE:APO) investors should pay attention to an increase in hedge fund sentiment in recent months. Our calculations also showed that APO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 87% since March 2017 and outperformed the S&P 500 ETFs by more than 51 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a look at the recent hedge fund action regarding Apollo Global Management LLC (NYSE:APO).
What does smart money think about Apollo Global Management LLC (NYSE:APO)?
At the end of the first quarter, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from one quarter earlier. By comparison, 18 hedge funds held shares or bullish call options in APO a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Tiger Global Management LLC was the largest shareholder of Apollo Global Management LLC (NYSE:APO), with a stake worth $1136.1 million reported as of the end of September. Trailing Tiger Global Management LLC was Lakewood Capital Management, which amassed a stake valued at $43.3 million. Millennium Management, Select Equity Group, and Markel Gayner Asset Management 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 Dorset Management allocated the biggest weight to Apollo Global Management LLC (NYSE:APO), around 7.88% of its 13F portfolio. Tiger Global Management LLC is also relatively very bullish on the stock, setting aside 6.84 percent of its 13F equity portfolio to APO.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Lakewood Capital Management, managed by Anthony Bozza, initiated the most valuable position in Apollo Global Management LLC (NYSE:APO). Lakewood Capital Management had $43.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $36 million investment in the stock during the quarter. The other funds with brand new APO positions are Richard Merage’s MIG Capital, David Brown’s Hawk Ridge Management, and Parsa Kiai’s Steamboat Capital Partners.
Let’s now take a look at hedge fund activity in other stocks similar to Apollo Global Management LLC (NYSE:APO). We will take a look at Globe Life Inc. (NYSE:GL), RPM International Inc. (NYSE:RPM), Host Hotels and Resorts Inc (NYSE:HST), and Mylan N.V. (NASDAQ:MYL). This group of stocks’ market values resemble APO’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GL | 22 | 574230 | -1 |
| RPM | 22 | 191448 | -9 |
| HST | 24 | 130445 | -3 |
| MYL | 49 | 1469905 | 2 |
| Average | 29.25 | 591507 | -2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.25 hedge funds with bullish positions and the average amount invested in these stocks was $592 million. That figure was $1487 million in APO’s case. Mylan N.V. (NASDAQ:MYL) is the most popular stock in this table. On the other hand Globe Life Inc. (NYSE:GL) is the least popular one with only 22 bullish hedge fund positions. Apollo Global Management LLC (NYSE:APO) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on APO as the stock returned 43.5% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
