Is Albertsons Companies, Inc. (ACI) A Good Stock To Buy?

In this article we will take a look at whether hedge funds think Albertsons Companies, Inc. (NYSE:ACI) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Is Albertsons Companies, Inc. (ACI) a good stock to buy now? The best stock pickers were buying. The number of bullish hedge fund positions advanced by 1 lately. Albertsons Companies, Inc. (NYSE:ACI) was in 21 hedge funds’ portfolios at the end of September. The all time high for this statistic is 30. Our calculations also showed that ACI isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 20 hedge funds in our database with ACI positions at the end of the second quarter.

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 let’s take a look at the latest hedge fund action encompassing Albertsons Companies, Inc. (NYSE:ACI).

Stephen Feinberg of Cerberus Capital Management

Do Hedge Funds Think ACI Is A Good Stock To Buy Now?

At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 5% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards ACI over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Cerberus Capital Management held the most valuable stake in Albertsons Companies, Inc. (NYSE:ACI), which was worth $4395.3 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $17.6 million worth of shares. D E Shaw, AQR Capital Management, 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 Cerberus Capital Management allocated the biggest weight to Albertsons Companies, Inc. (NYSE:ACI), around 74.34% of its 13F portfolio. Verdad Advisers is also relatively very bullish on the stock, dishing out 2.59 percent of its 13F equity portfolio to ACI.

Consequently, specific money managers were leading the bulls’ herd. AQR Capital Management, managed by Cliff Asness, established the biggest position in Albertsons Companies, Inc. (NYSE:ACI). AQR Capital Management had $15 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $9.2 million position during the quarter. The other funds with brand new ACI positions are Jack Woodruff’s Candlestick Capital Management, Anand Parekh’s Alyeska Investment Group, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Albertsons Companies, Inc. (NYSE:ACI) but similarly valued. We will take a look at Apollo Global Management Inc (NYSE:APO), Shaw Communications Inc (NYSE:SJR), The Interpublic Group of Companies Inc (NYSE:IPG), monday.com Ltd. (NASDAQ:MNDY), Equity Lifestyle Properties, Inc. (NYSE:ELS), RH (NYSE:RH), and Evergy, Inc. (NYSE:EVRG). This group of stocks’ market valuations are similar to ACI’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.9 hedge funds with bullish positions and the average amount invested in these stocks was $1569 million. That figure was $4510 million in ACI’s case. RH (NYSE:RH) is the most popular stock in this table. On the other hand monday.com Ltd. (NASDAQ:MNDY) is the least popular one with only 17 bullish hedge fund positions. Albertsons Companies, Inc. (NYSE:ACI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ACI is 32. 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 29.6% in 2021 and surpassed the market again by 3.6 percentage points. Unfortunately ACI wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ACI investors were disappointed as the stock returned -2.6% since the end of September (through 12/31) 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.