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. Insider Monkey finished processing 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2020. What do these smart investors think about Affiliated Managers Group, Inc. (NYSE:AMG)?
Is AMG stock a buy? Affiliated Managers Group, Inc. (NYSE:AMG) was in 27 hedge funds’ portfolios at the end of December. The all time high for this statistic is 38. AMG investors should be aware of an increase in activity from the world’s largest hedge funds recently. There were 23 hedge funds in our database with AMG positions at the end of the third quarter. Our calculations also showed that AMG isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Paul Isaac of Arbiter Partners Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind let’s take a gander at the fresh hedge fund action encompassing Affiliated Managers Group, Inc. (NYSE:AMG).
Do Hedge Funds Think AMG Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AMG over the last 22 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
The largest stake in Affiliated Managers Group, Inc. (NYSE:AMG) was held by Southeastern Asset Management, which reported holding $164.5 million worth of stock at the end of December. It was followed by Lyrical Asset Management with a $105.2 million position. Other investors bullish on the company included Ariel Investments, Hillhouse Capital Management, and Polar Capital. In terms of the portfolio weights assigned to each position Southeastern Asset Management allocated the biggest weight to Affiliated Managers Group, Inc. (NYSE:AMG), around 3.67% of its 13F portfolio. Hi-Line Capital Management is also relatively very bullish on the stock, setting aside 2.29 percent of its 13F equity portfolio to AMG.
Consequently, key money managers have jumped into Affiliated Managers Group, Inc. (NYSE:AMG) headfirst. Gillson Capital, managed by Daniel Johnson, established the largest position in Affiliated Managers Group, Inc. (NYSE:AMG). Gillson Capital had $14.4 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors also initiated a $7.2 million position during the quarter. The other funds with brand new AMG positions are Stephen Mildenhall’s Contrarius Investment Management, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Ray Dalio’s Bridgewater Associates.
Let’s go over hedge fund activity in other stocks similar to Affiliated Managers Group, Inc. (NYSE:AMG). These stocks are Goosehead Insurance, Inc. (NASDAQ:GSHD), 21Vianet Group Inc (NASDAQ:VNET), SmileDirectClub, Inc. (NASDAQ:SDC), Sinopec Shanghai Petrochemical Co. (NYSE:SHI), Xerox Holdings Corporation (NYSE:XRX), Spirit Realty Capital Inc (NYSE:SRC), and Graphic Packaging Holding Company (NYSE:GPK). This group of stocks’ market caps resemble AMG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GSHD | 21 | 201139 | -1 |
| VNET | 33 | 730876 | 9 |
| SDC | 25 | 182727 | -3 |
| SHI | 5 | 14178 | 2 |
| XRX | 27 | 1011222 | -1 |
| SRC | 17 | 214681 | 1 |
| GPK | 26 | 375108 | -4 |
| Average | 22 | 389990 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $390 million. That figure was $511 million in AMG’s case. 21Vianet Group Inc (NASDAQ:VNET) is the most popular stock in this table. On the other hand Sinopec Shanghai Petrochemical Co. (NYSE:SHI) is the least popular one with only 5 bullish hedge fund positions. Affiliated Managers Group, Inc. (NYSE:AMG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AMG is 69.6. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Hedge funds were also right about betting on AMG as the stock returned 54.3% since the end of Q4 (through 4/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
