At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
Ameriprise Financial, Inc. (NYSE:AMP) was in 33 hedge funds’ portfolios at the end of the third quarter of 2018. AMP has seen an increase in hedge fund sentiment recently. There were 30 hedge funds in our database with AMP positions at the end of the previous quarter. Our calculations also showed that amp isn’t among the 30 most popular stocks among hedge funds.
If you’d ask most shareholders, hedge funds are perceived as underperforming, old financial tools of years past. While there are more than 8,000 funds in operation today, Our experts hone in on the elite of this group, about 700 funds. Most estimates calculate that this group of people preside over the majority of the smart money’s total capital, and by following their unrivaled equity investments, Insider Monkey has figured out various investment strategies that have historically outperformed the broader indices. Insider Monkey’s flagship hedge fund strategy outperformed the S&P 500 index by 6 percentage points annually since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
Cliff Asness of AQR Capital Management
Let’s take a look at the latest hedge fund action regarding Ameriprise Financial, Inc. (NYSE:AMP).
What does the smart money think about Ameriprise Financial, Inc. (NYSE:AMP)?
At the end of the third quarter, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from the previous quarter. On the other hand, there were a total of 33 hedge funds with a bullish position in AMP at the beginning of this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Ameriprise Financial, Inc. (NYSE:AMP) was held by AQR Capital Management, which reported holding $328.3 million worth of stock at the end of September. It was followed by GLG Partners with a $238.2 million position. Other investors bullish on the company included Arrowstreet Capital, Citadel Investment Group, and Millennium Management.
As one would reasonably expect, some big names were leading the bulls’ herd. Prana Capital Management, managed by Peter Seuss, created the most outsized position in Ameriprise Financial, Inc. (NYSE:AMP). Prana Capital Management had $30.9 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $10.3 million investment in the stock during the quarter. The following funds were also among the new AMP investors: Matthew Hulsizer’s PEAK6 Capital Management, Paul Tudor Jones’s Tudor Investment Corp, and Thomas Bailard’s Bailard Inc.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Ameriprise Financial, Inc. (NYSE:AMP) but similarly valued. These stocks are KeyCorp (NYSE:KEY), ORIX Corporation (NYSE:IX), Rogers Communications Inc. (NYSE:RCI), and PPL Corporation (NYSE:PPL). This group of stocks’ market valuations are closest to AMP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KEY | 41 | 802842 | 5 |
| IX | 6 | 6038 | 1 |
| RCI | 15 | 450839 | -1 |
| PPL | 24 | 936980 | 0 |
| Average | 21.5 | 549175 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $549 million. That figure was $1.29 billion in AMP’s case. KeyCorp (NYSE:KEY) is the most popular stock in this table. On the other hand ORIX Corporation (NYSE:IX) is the least popular one with only 6 bullish hedge fund positions. Ameriprise Financial, Inc. (NYSE:AMP) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard KEY might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
