The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 867 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30th holdings, data that is available nowhere else. Should you consider Alight Inc. (NYSE:ALIT) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Alight Inc. (NYSE:ALIT) a buy here? Hedge funds were buying. The number of long hedge fund bets advanced by 42 lately. Alight Inc. (NYSE:ALIT) was in 42 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that ALIT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Aaron Cowen of Suvretta Capital Management
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 let’s check out the key hedge fund action regarding Alight Inc. (NYSE:ALIT).
Do Hedge Funds Think ALIT Is A Good Stock To Buy Now?
At third quarter’s end, a total of 42 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 42 from the previous quarter. The graph below displays the number of hedge funds with bullish position in ALIT over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, FPR Partners held the most valuable stake in Alight Inc. (NYSE:ALIT), which was worth $212.8 million at the end of the third quarter. On the second spot was Third Point which amassed $195.2 million worth of shares. MFN Partners, Suvretta Capital Management, and Appaloosa Management LP 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 Azora Capital allocated the biggest weight to Alight Inc. (NYSE:ALIT), around 7.5% of its 13F portfolio. FPR Partners is also relatively very bullish on the stock, earmarking 5.65 percent of its 13F equity portfolio to ALIT.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. FPR Partners, managed by Bob Peck and Andy Raab, assembled the largest position in Alight Inc. (NYSE:ALIT). FPR Partners had $212.8 million invested in the company at the end of the quarter. Dan Loeb’s Third Point also made a $195.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Farhad Nanji and Michael DeMichele’s MFN Partners, Aaron Cowen’s Suvretta Capital Management, and David Tepper’s Appaloosa Management LP.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Alight Inc. (NYSE:ALIT) but similarly valued. We will take a look at Compass Inc. (NYSE:COMP), South State Corporation (NASDAQ:SSB), IDACORP Inc (NYSE:IDA), National Instruments Corporation (NASDAQ:NATI), Stantec Inc. (NYSE:STN), TIM S.A. (NYSE:TIMB), and LegalZoom.com Inc. (NASDAQ:LZ). This group of stocks’ market valuations match ALIT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| COMP | 25 | 708383 | 25 |
| SSB | 20 | 282835 | 2 |
| IDA | 12 | 81266 | -3 |
| NATI | 24 | 249677 | 3 |
| STN | 9 | 75656 | -1 |
| TIMB | 11 | 75843 | 0 |
| LZ | 16 | 179836 | 16 |
| Average | 16.7 | 236214 | 6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.7 hedge funds with bullish positions and the average amount invested in these stocks was $236 million. That figure was $1278 million in ALIT’s case. Compass Inc. (NYSE:COMP) is the most popular stock in this table. On the other hand Stantec Inc. (NYSE:STN) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Alight Inc. (NYSE:ALIT) is more popular among hedge funds. Our overall hedge fund sentiment score for ALIT is 90. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately ALIT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ALIT were disappointed as the stock returned -9.4% since the end of the third quarter (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 since 2019.
Follow Alight Inc. / Delaware (NYSE:ALIT)
Follow Alight Inc. / Delaware (NYSE:ALIT)
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Disclosure: None. This article was originally published at Insider Monkey.
