We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article we look at what those investors think of American Airlines Group Inc (NASDAQ:AAL).
Is American Airlines Group Inc (NASDAQ:AAL) the right pick for your portfolio? The best stock pickers are getting less optimistic. The number of bullish hedge fund bets retreated by 6 lately. AAL was in 50 hedge funds’ portfolios at the end of September. There were 56 hedge funds in our database with AAL holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Rogers Communications Inc. (USA) (NYSE:RCI), Williams Companies, Inc. (NYSE:WMB), and Telecom Italia S.p.A. (ADR) (NYSE:TI) to gather more data points.
Follow American Airlines Group Inc. (NASDAQ:AAL)
Follow American Airlines Group Inc. (NASDAQ:AAL)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
With all of this in mind, let’s view the key action encompassing American Airlines Group Inc (NASDAQ:AAL).
How are hedge funds trading American Airlines Group Inc (NASDAQ:AAL)?
Heading into the fourth quarter of 2016, a total of 50 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 11% down from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Berkshire Hathaway, led by Warren Buffett, holds the most valuable position in American Airlines Group Inc (NASDAQ:AAL). Berkshire Hathaway has a $797 million position in the stock. On Berkshire Hathaway’s heels is Ross Margolies of Stelliam Investment Management, with a $204.2 million position; the fund has 6.8% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions comprise James Dondero’s Highland Capital Management, and Stephen C. Freidheim’s Cyrus Capital Partners. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Judging by the fact that American Airlines Group Inc (NASDAQ:AAL) has experienced declining sentiment from hedge fund managers, we can see that there is a sect of hedge funds that decided to sell off their entire stakes in the third quarter. It’s worth mentioning that Ken Griffin’s Citadel Investment Group dumped the largest investment of the “upper crust” of funds tracked by Insider Monkey, totaling an estimated $61.8 million in call options. Arrowstreet Capital and Wexford Capital also sold out of AAL though their positions were slightly less than $10 million in size.
Let’s now review hedge fund activity in other stocks similar to American Airlines Group Inc (NASDAQ:AAL). These stocks are Energy Transfer Partners LP (NYSE:ETP), Coca-Cola Enterprises Inc (NYSE:CCE), Nielsen Hldg NV (NYSE:NLSN), and Vornado Realty Trust (NYSE:VNO). This group of stocks’ market values are closest to AAL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ETP | 22 | 956722 | 0 |
| CCE | 32 | 978088 | -8 |
| NLSN | 26 | 436451 | -3 |
| VNO | 24 | 264017 | 2 |
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $659 million. That figure was $2.03 billion in AAL’s case. Coca-Cola Enterprises Inc (NYSE:CCE) is the most popular stock in this table. On the other hand Energy Transfer Partners LP (NYSE:ETP) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks American Airlines Group Inc (NASDAQ:AAL) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
