Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those successful funds in these small-cap stocks. In the following paragraphs, we analyze Allegiant Travel Company (NASDAQ:ALGT) from the perspective of those successful funds.
Is Allegiant Travel Company (NASDAQ:ALGT) a healthy stock for your portfolio? It looks like the smart money is getting more optimistic. The number of long hedge fund positions increased by three during the third quarter and there were 21 hedge funds in our database with ALGT holdings at the end of September. At the end of this article we will also compare ALGT to other stocks including Sanderson Farms, Inc. (NASDAQ:SAFM), Glacier Bancorp, Inc. (NASDAQ:GBCI), and Owens & Minor, Inc. (NYSE:OMI) to get a better sense of its popularity.
Follow Allegiant Travel Co (NASDAQ:ALGT)
Follow Allegiant Travel Co (NASDAQ:ALGT)
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.
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With all of this in mind, let’s take a look at the key action encompassing Allegiant Travel Company (NASDAQ:ALGT).
How have hedgies been trading Allegiant Travel Company (NASDAQ:ALGT)?
Heading into the fourth quarter of 2016, 21 funds tracked by Insider Monkey were long this stock, which represents an increase of 17% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ALGT over the last five quarters. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the most valuable position in Allegiant Travel Company (NASDAQ:ALGT). Renaissance Technologies has a $156.7 million position in the stock, comprising 0.3% of its 13F portfolio. On Renaissance Technologies’s heels is Philippe Laffont’s Coatue Management, with a $21.3 million position; 0.3% of its 13F portfolio is allocated to the stock. Some other members of the smart money that are bullish contain Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group, and Joel Greenblatt’s Gotham Asset Management. 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.
As aggregate interest increased, key hedge funds have been driving this bullishness. Coatue Management initiated the most outsized position in Allegiant Travel Company (NASDAQ:ALGT). Paul Orlin and Alex Porter’s Amici Capital also initiated a $4.4 million position during the third quarter. The other funds with brand new ALGT positions are John Tompkins’ Tyvor Capital, Glenn Russell Dubin’s Highbridge Capital Management, and Ken Griffin’s Citadel Investment Group.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Allegiant Travel Company (NASDAQ:ALGT) but similarly valued. We will take a look at Sanderson Farms, Inc. (NASDAQ:SAFM), Glacier Bancorp, Inc. (NASDAQ:GBCI), Owens & Minor, Inc. (NYSE:OMI), and Globus Medical Inc (NYSE:GMED). All of these stocks’ market caps are closest to ALGT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SAFM | 21 | 202162 | 4 |
| GBCI | 5 | 94491 | -1 |
| OMI | 13 | 128694 | -3 |
| GMED | 14 | 115716 | -6 |
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $135 million, compared to $225 million in ALGT’s case. Sanderson Farms, Inc. (NASDAQ:SAFM) is the most popular stock in this table. On the other hand Glacier Bancorp, Inc. (NASDAQ:GBCI) is the least popular one with only five funds holding shares. Allegiant Travel Company (NASDAQ:ALGT) has the same number of funds as the most popular stock in this table, Sanderson Farms, which suggests that it could be a good idea to analyze it in more detail and consider adding it to one’s portfolio.
Disclosure: none
