Here is Smart Money Thinks of About Altria Group Inc (MO)

The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Altria Group Inc (NYSE:MO).

Altria Group Inc (NYSE:MO) investors should pay attention to a decrease in hedge fund sentiment lately, although the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as UnitedHealth Group Inc. (NYSE:UNH), Citigroup Inc. (NYSE:C), and PetroChina Company Limited (ADR) (NYSE:PTR) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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With all of this in mind, let’s take a look at the fresh action surrounding Altria Group Inc (NYSE:MO).

What have hedge funds been doing with Altria Group Inc (NYSE:MO)?

A total of 40 of the hedge funds followed by Insider Monkey were bullish on Altria Group, down by 13% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the number one position in Altria Group Inc (NYSE:MO). Arrowstreet Capital has a $400.9 million position in the stock, comprising 1.3% of its 13F portfolio. On Arrowstreet Capital’s heels is Gardner Russo & Gardner, led by Tom Russo, holding a $372.6 million position; 3.1% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism encompass Cliff Asness’ AQR Capital Management, Jim Simons’ Renaissance Technologies, and David E. Shaw’s D E Shaw.

Judging by the fact that Altria Group Inc (NYSE:MO) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of fund managers that elected to cut their entire stakes during the third quarter. At the top of the heap, Israel Englander’s Millennium Management dropped the biggest investment of all the hedgies tracked by Insider Monkey, totaling close to $59.2 million in call options.. Ken Griffin’s fund, Citadel Investment Group, also said goodbye to its call options., about $57.2 million worth.

Let’s now take a look at hedge fund activity in other stocks similar to Altria Group Inc (NYSE:MO). These stocks are UnitedHealth Group Inc. (NYSE:UNH), Citigroup Inc. (NYSE:C), PetroChina Company Limited (ADR) (NYSE:PTR), and HSBC Holdings plc (ADR) (NYSE:HSBC). All of these stocks’ market caps are similar to MO’s market cap.

As you can see these stocks had an average of 44 funds with bullish positions and the average amount invested in these stocks was $3.13 billion. That figure was $1.77 billion in Altria Group’s case. Citigroup Inc. (NYSE:C) is the most popular stock in this table. On the other hand PetroChina Company Limited (ADR) (NYSE:PTR) is the least popular one with only 11 bullish hedge fund positions. Altria Group Inc (NYSE:MO) 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, Citigroup Inc. (NYSE:C) might be a better candidate to consider a long position.