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. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Alaska Air Group, Inc. (NYSE:ALK).
Is Alaska Air Group, Inc. (NYSE:ALK) a buy right now? Prominent investors were in an optimistic mood. The number of long hedge fund bets advanced by 3 in recent months. Alaska Air Group, Inc. (NYSE:ALK) was in 41 hedge funds’ portfolios at the end of September. The all time high for this statistic is 42. Our calculations also showed that ALK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Paul Reeder of PAR Capital Management
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. Now we’re going to take a glance at the fresh hedge fund action regarding Alaska Air Group, Inc. (NYSE:ALK).
Do Hedge Funds Think ALK Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 41 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ALK over the last 25 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, PAR Capital Management was the largest shareholder of Alaska Air Group, Inc. (NYSE:ALK), with a stake worth $94.2 million reported as of the end of September. Trailing PAR Capital Management was Millennium Management, which amassed a stake valued at $89.4 million. Citadel Investment Group, Holocene Advisors, and Citadel Investment Group 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 1060 Capital Management allocated the biggest weight to Alaska Air Group, Inc. (NYSE:ALK), around 7.74% of its 13F portfolio. Jade Capital Advisors is also relatively very bullish on the stock, dishing out 2.57 percent of its 13F equity portfolio to ALK.
As aggregate interest increased, specific money managers have been driving this bullishness. Holocene Advisors, managed by Brandon Haley, created the biggest position in Alaska Air Group, Inc. (NYSE:ALK). Holocene Advisors had $54.5 million invested in the company at the end of the quarter. Jack Woodruff’s Candlestick Capital Management also initiated a $37.1 million position during the quarter. The following funds were also among the new ALK investors: Jack Woodruff’s Candlestick Capital Management, Michael Gelband’s ExodusPoint Capital, and Gregg Moskowitz’s Interval Partners.
Let’s now review hedge fund activity in other stocks similar to Alaska Air Group, Inc. (NYSE:ALK). We will take a look at PVH Corp (NYSE:PVH), Pearson PLC (NYSE:PSO), Chemed Corporation (NYSE:CHE), Legend Biotech Corporation (NASDAQ:LEGN), OneMain Holdings Inc (NYSE:OMF), Plains All American Pipeline, L.P. (NYSE:PAA), and Companhia Siderurgica Nacional (NYSE:SID). This group of stocks’ market values are similar to ALK’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PVH | 38 | 2157407 | 10 |
| PSO | 8 | 15064 | 1 |
| CHE | 20 | 272040 | -10 |
| LEGN | 14 | 947002 | -5 |
| OMF | 41 | 1047061 | 0 |
| PAA | 7 | 51655 | 0 |
| SID | 11 | 46539 | -1 |
| Average | 19.9 | 648110 | -0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.9 hedge funds with bullish positions and the average amount invested in these stocks was $648 million. That figure was $648 million in ALK’s case. OneMain Holdings Inc (NYSE:OMF) is the most popular stock in this table. On the other hand Plains All American Pipeline, L.P. (NYSE:PAA) is the least popular one with only 7 bullish hedge fund positions. Alaska Air Group, Inc. (NYSE:ALK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ALK is 87.3. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 beat the market again by 5.6 percentage points. Unfortunately ALK wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ALK were disappointed as the stock returned -17.1% since the end of September (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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
