Here is What Hedge Funds Think About American Airlines Group Inc (AAL)

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th. We at Insider Monkey have made an extensive database of more than 867 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded American Airlines Group Inc (NASDAQ:AAL) based on those filings.

American Airlines Group Inc (NASDAQ:AAL) shareholders have witnessed an increase in hedge fund interest of late. American Airlines Group Inc (NASDAQ:AAL) was in 30 hedge funds’ portfolios at the end of September. The all time high for this statistic is 77. There were 25 hedge funds in our database with AAL holdings at the end of June. Our calculations also showed that AAL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

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 we’re going to take a gander at the latest hedge fund action surrounding American Airlines Group Inc (NASDAQ:AAL).

John Overdeck of Two Sigma Advisors

Do Hedge Funds Think AAL 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 long this stock, a change of 20% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in AAL over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in American Airlines Group Inc (NASDAQ:AAL) was held by Citadel Investment Group, which reported holding $213.6 million worth of stock at the end of September. It was followed by Two Sigma Advisors with a $164.4 million position. Other investors bullish on the company included Alkeon Capital Management, Renaissance Technologies, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Ovata Capital Management allocated the biggest weight to American Airlines Group Inc (NASDAQ:AAL), around 3.27% of its 13F portfolio. PAR Capital Management is also relatively very bullish on the stock, dishing out 1.54 percent of its 13F equity portfolio to AAL.

Consequently, some big names have been driving this bullishness. Renaissance Technologies, initiated the most valuable position in American Airlines Group Inc (NASDAQ:AAL). Renaissance Technologies had $106.9 million invested in the company at the end of the quarter. Louis Bacon’s Moore Global Investments also made a $13.1 million investment in the stock during the quarter. The following funds were also among the new AAL investors: James Chen’s Ovata Capital Management, Michael Cowley’s Sandbar Asset Management, and Alexander Mitchell’s Scopus Asset Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as American Airlines Group Inc (NASDAQ:AAL) but similarly valued. We will take a look at Teck Resources Ltd (NYSE:TECK), Open Text Corporation (NASDAQ:OTEX), Crown Holdings, Inc. (NYSE:CCK), Athene Holding Ltd. (NYSE:ATH), Icahn Enterprises LP (NASDAQ:IEP), CBOE Global Markets Inc (NASDAQ:CBOE), and Williams-Sonoma, Inc. (NYSE:WSM). This group of stocks’ market valuations resemble AAL’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 33.1 hedge funds with bullish positions and the average amount invested in these stocks was $2801 million. That figure was $651 million in AAL’s case. Crown Holdings, Inc. (NYSE:CCK) is the most popular stock in this table. On the other hand Icahn Enterprises LP (NASDAQ:IEP) is the least popular one with only 4 bullish hedge fund positions. American Airlines Group Inc (NASDAQ:AAL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AAL is 48.8. 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 negative signal and 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 surpassed the market again by 5.6 percentage points. Unfortunately AAL wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); AAL investors were disappointed as the stock returned -13.8% 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 most of these stocks already outperformed the market in 2021.

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