Here is What Hedge Funds Think About Affiliated Managers Group, Inc. (AMG)

We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Melvin Capital’s recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Affiliated Managers Group, Inc. (NYSE:AMG).

Hedge fund interest in Affiliated Managers Group, Inc. (NYSE:AMG) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that AMG 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 AMG to other stocks including Duolingo Inc. (NASDAQ:DUOL), ANGI Inc (NASDAQ:ANGI), and Emcor Group Inc (NYSE:EME) to get a better sense of its popularity.

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 let’s take a look at the fresh hedge fund action surrounding Affiliated Managers Group, Inc. (NYSE:AMG).

John Rogers of Ariel Investments

Do Hedge Funds Think AMG Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 23 hedge funds held shares or bullish call options in AMG 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.

When looking at the institutional investors followed by Insider Monkey, Mason Hawkins’s Southeastern Asset Management has the number one position in Affiliated Managers Group, Inc. (NYSE:AMG), worth close to $241.7 million, accounting for 4.6% of its total 13F portfolio. Coming in second is Andrew Wellington and Jeff Keswin of Lyrical Asset Management, with a $143.9 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism consist of John W. Rogers’s Ariel Investments, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Lei Zhang’s Hillhouse Capital Management. In terms of the portfolio weights assigned to each position Southeastern Asset Management allocated the biggest weight to Affiliated Managers Group, Inc. (NYSE:AMG), around 4.59% of its 13F portfolio. Wallace Capital Management is also relatively very bullish on the stock, designating 2.83 percent of its 13F equity portfolio to AMG.

Due to the fact that Affiliated Managers Group, Inc. (NYSE:AMG) has witnessed falling interest from hedge fund managers, we can see that there lies a certain “tier” of funds that slashed their full holdings last quarter. Interestingly, Renaissance Technologies cut the biggest stake of the “upper crust” of funds followed by Insider Monkey, comprising close to $7.6 million in call options. Matthew Hulsizer’s fund, PEAK6 Capital Management, also said goodbye to its call options, about $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 check out hedge fund activity in other stocks similar to Affiliated Managers Group, Inc. (NYSE:AMG). These stocks are Duolingo Inc. (NASDAQ:DUOL), ANGI Inc (NASDAQ:ANGI), Emcor Group Inc (NYSE:EME), Acuity Brands, Inc. (NYSE:AYI), Freshpet Inc (NASDAQ:FRPT), BOK Financial Corporation (NASDAQ:BOKF), and CACI International Inc (NYSE:CACI). All of these stocks’ market caps match AMG’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.3 hedge funds with bullish positions and the average amount invested in these stocks was $310 million. That figure was $754 million in AMG’s case. ANGI Inc (NASDAQ:ANGI) is the most popular stock in this table. On the other hand Duolingo Inc. (NASDAQ:DUOL) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Affiliated Managers Group, Inc. (NYSE:AMG) is more popular among hedge funds. Our overall hedge fund sentiment score for AMG is 78.7. 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 AMG as the stock returned 12.6% 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.

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Disclosure: None. This article was originally published at Insider Monkey.