Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of American Financial Group (NYSE:AFG).
American Financial Group (NYSE:AFG) was in 23 hedge funds’ portfolios at the end of September. The all time high for this statistic is 30. AFG investors should be aware of an increase in hedge fund sentiment recently. There were 19 hedge funds in our database with AFG holdings at the end of June. Our calculations also showed that AFG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Jim Simons of Renaissance Technologies
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 look at the fresh hedge fund action regarding American Financial Group (NYSE:AFG).
Do Hedge Funds Think AFG Is A Good Stock To Buy Now?
At third quarter’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 21% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards AFG over the last 25 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Gavin M. Abrams’s Abrams Bison Investments has the number one position in American Financial Group (NYSE:AFG), worth close to $72.4 million, comprising 5.4% of its total 13F portfolio. The second most bullish fund manager is Millennium Management, managed by Israel Englander, which holds a $65.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions comprise Dmitry Balyasny’s Balyasny Asset Management, Thomas Rigo’s Bishop Rock Capital and Steve Cohen’s Point72 Asset Management. In terms of the portfolio weights assigned to each position Abrams Bison Investments allocated the biggest weight to American Financial Group (NYSE:AFG), around 5.39% of its 13F portfolio. Bishop Rock Capital is also relatively very bullish on the stock, earmarking 4.99 percent of its 13F equity portfolio to AFG.
As aggregate interest increased, specific money managers were leading the bulls’ herd. Abrams Bison Investments, managed by Gavin M. Abrams, created the largest position in American Financial Group (NYSE:AFG). Abrams Bison Investments had $72.4 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also made a $2.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Renaissance Technologies, Greg Eisner’s Engineers Gate Manager, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as American Financial Group (NYSE:AFG) but similarly valued. These stocks are Henry Schein, Inc. (NASDAQ:HSIC), Dicks Sporting Goods Inc (NYSE:DKS), GDS Holdings Limited (NASDAQ:GDS), Cemex SAB de CV (NYSE:CX), Ozon Holdings PLC (NASDAQ:OZON), Regal Beloit Corporation (NYSE:RBC), and Acceleron Pharma Inc (NASDAQ:XLRN). This group of stocks’ market caps match AFG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HSIC | 31 | 1483481 | -8 |
| DKS | 36 | 1615509 | 0 |
| GDS | 24 | 1018195 | -14 |
| CX | 19 | 438842 | -4 |
| OZON | 13 | 203434 | -6 |
| RBC | 30 | 526548 | -1 |
| XLRN | 58 | 2613991 | 15 |
| Average | 30.1 | 1128571 | -2.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.1 hedge funds with bullish positions and the average amount invested in these stocks was $1129 million. That figure was $240 million in AFG’s case. Acceleron Pharma Inc (NASDAQ:XLRN) is the most popular stock in this table. On the other hand Ozon Holdings PLC (NASDAQ:OZON) is the least popular one with only 13 bullish hedge fund positions. American Financial Group (NYSE:AFG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AFG is 43.1. 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 gained 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. A small number of hedge funds were also right about betting on AFG as the stock returned 12.4% since the end of the third quarter (through 12/9) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
