Is Alaska Air Group, Inc. (NYSE:ALK) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to find the latest market-moving information.
Alaska Air Group, Inc. (NYSE:ALK) was in 20 hedge funds’ portfolios at the end of September. ALK has experienced an increase in hedge fund sentiment lately. There were 19 hedge funds in our database with ALK holdings at the end of the previous quarter. Our calculations also showed that ALK isn’t among the 30 most popular stocks among hedge funds.
At the moment there are many methods market participants can use to evaluate stocks. Some of the most innovative methods are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the elite investment managers can trounce their index-focused peers by a superb margin (see the details here).
Let’s take a look at the latest hedge fund action regarding Alaska Air Group, Inc. (NYSE:ALK).
How are hedge funds trading Alaska Air Group, Inc. (NYSE:ALK)?
Heading into the fourth quarter of 2018, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in ALK over the last 13 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 $172.2 million reported as of the end of September. Trailing PAR Capital Management was Diamond Hill Capital, which amassed a stake valued at $99.1 million. Point72 Asset Management, Senator Investment Group, and Adage Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
As one would reasonably expect, key hedge funds have jumped into Alaska Air Group, Inc. (NYSE:ALK) headfirst. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, assembled the largest position in Alaska Air Group, Inc. (NYSE:ALK). Senator Investment Group had $21.3 million invested in the company at the end of the quarter. Robert Bishop’s Impala Asset Management also initiated a $2 million position during the quarter. The other funds with new positions in the stock are Richard Driehaus’s Driehaus Capital, John Brandmeyer’s Cognios Capital, and Mike Vranos’s Ellington.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Alaska Air Group, Inc. (NYSE:ALK) but similarly valued. We will take a look at FLIR Systems, Inc. (NASDAQ:FLIR), IPG Photonics Corporation (NASDAQ:IPGP), Credit Acceptance Corp. (NASDAQ:CACC), and WPX Energy Inc (NYSE:WPX). This group of stocks’ market values resemble ALK’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FLIR | 27 | 558828 | 1 |
| IPGP | 16 | 287166 | -3 |
| CACC | 20 | 1204887 | 4 |
| WPX | 53 | 1247025 | 13 |
| Average | 29 | 824477 | 3.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $824 million. That figure was $462 million in ALK’s case. WPX Energy Inc (NYSE:WPX) is the most popular stock in this table. On the other hand IPG Photonics Corporation (NASDAQ:IPGP) is the least popular one with only 16 bullish hedge fund positions. Alaska Air Group, Inc. (NYSE:ALK) 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 WPX might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
