Is AMP Stock A Buy or Sell?

While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Ameriprise Financial, Inc. (NYSE:AMP).

Is AMP stock a buy? Ameriprise Financial, Inc. (NYSE:AMP) shareholders have witnessed an increase in hedge fund sentiment recently. Ameriprise Financial, Inc. (NYSE:AMP) was in 34 hedge funds’ portfolios at the end of December. The all time high for this statistic is 39. Our calculations also showed that AMP isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).

Ray Dalio of Bridgewater Associates

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 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 analyze the latest hedge fund action regarding Ameriprise Financial, Inc. (NYSE:AMP).

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

At the end of December, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the third quarter of 2020. The graph below displays the number of hedge funds with bullish position in AMP over the last 22 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

Among these funds, Lyrical Asset Management held the most valuable stake in Ameriprise Financial, Inc. (NYSE:AMP), which was worth $363.4 million at the end of the fourth quarter. On the second spot was AQR Capital Management which amassed $76.2 million worth of shares. Millennium Management, Adage Capital Management, and GLG Partners 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 Lyrical Asset Management allocated the biggest weight to Ameriprise Financial, Inc. (NYSE:AMP), around 5.02% of its 13F portfolio. Prana Capital Management is also relatively very bullish on the stock, dishing out 1.84 percent of its 13F equity portfolio to AMP.

Consequently, some big names were leading the bulls’ herd. Prana Capital Management, managed by Peter Seuss, initiated the biggest position in Ameriprise Financial, Inc. (NYSE:AMP). Prana Capital Management had $14.1 million invested in the company at the end of the quarter. Schonfeld Strategic Advisors also made a $10.8 million investment in the stock during the quarter. The other funds with brand new AMP positions are Ray Dalio’s Bridgewater Associates, Greg Eisner’s Engineers Gate Manager, and Jinghua Yan’s TwinBeech Capital.

Let’s also examine hedge fund activity in other stocks similar to Ameriprise Financial, Inc. (NYSE:AMP). We will take a look at Old Dominion Freight Line (NASDAQ:ODFL), Garmin Ltd. (NASDAQ:GRMN), Ryanair Holdings plc (NASDAQ:RYAAY), FleetCor Technologies, Inc. (NYSE:FLT), Coca-Cola European Partners plc (NYSE:CCEP), Viatris Inc. (NASDAQ:VTRS), and MPLX LP (NYSE:MPLX). This group of stocks’ market caps match AMP’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 36 hedge funds with bullish positions and the average amount invested in these stocks was $1160 million. That figure was $643 million in AMP’s case. Viatris Inc. (NASDAQ:VTRS) is the most popular stock in this table. On the other hand MPLX LP (NYSE:MPLX) is the least popular one with only 13 bullish hedge fund positions. Ameriprise Financial, Inc. (NYSE:AMP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AMP is 55.6. 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 7.9% in 2021 through April 1st and still beat the market by 0.4 percentage points. A small number of hedge funds were also right about betting on AMP as the stock returned 21.7% since the end of the fourth quarter (through 4/1) and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.