Should I Avoid Athene Holding Ltd. (ATH)?

With the second-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the third quarter of 2021. One of these stocks was Athene Holding Ltd. (NYSE:ATH).

Athene Holding Ltd. (NYSE:ATH) shareholders have witnessed a decrease in hedge fund interest of late. Athene Holding Ltd. (NYSE:ATH) was in 43 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 50. Our calculations also showed that ATH isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Mark Kingdon of Kingdon Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, artificial intelligence is one of the fastest-growing industries right now, so we are checking out stock pitches like this emerging AI stock. 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. 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 homepage. Now let’s check out the key hedge fund action surrounding Athene Holding Ltd. (NYSE:ATH).

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

At Q2’s end, a total of 43 of the hedge funds tracked by Insider Monkey were long this stock, a change of -2% from one quarter earlier. On the other hand, there were a total of 33 hedge funds with a bullish position in ATH a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Magnetar Capital, managed by Alec Litowitz and Ross Laser, holds the number one position in Athene Holding Ltd. (NYSE:ATH). Magnetar Capital has a $163.2 million position in the stock, comprising 1.5% of its 13F portfolio. Coming in second is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $134.9 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other members of the smart money that are bullish include Matthew Halbower’s Pentwater Capital Management, Leon Cooperman’s Omega Advisors and Robert Emil Zoellner’s Alpine Associates. In terms of the portfolio weights assigned to each position OCO Capital Partners allocated the biggest weight to Athene Holding Ltd. (NYSE:ATH), around 50.62% of its 13F portfolio. Moab Capital Partners is also relatively very bullish on the stock, dishing out 13.6 percent of its 13F equity portfolio to ATH.

Seeing as Athene Holding Ltd. (NYSE:ATH) has faced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of money managers who sold off their positions entirely last quarter. At the top of the heap, Usman Waheed’s Strycker View Capital dumped the biggest stake of all the hedgies tracked by Insider Monkey, worth close to $7.9 million in stock, and Matthew Hulsizer’s PEAK6 Capital Management was right behind this move, as the fund said goodbye to about $7.3 million worth. These moves are important to note, as total hedge fund interest was cut by 1 funds last quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Athene Holding Ltd. (NYSE:ATH) but similarly valued. We will take a look at Tenaris S.A. (NYSE:TS), Packaging Corporation Of America (NYSE:PKG), Graco Inc. (NYSE:GGG), DaVita Inc (NYSE:DVA), The Interpublic Group of Companies Inc (NYSE:IPG), Nordson Corporation (NASDAQ:NDSN), and Vail Resorts, Inc. (NYSE:MTN). All of these stocks’ market caps are closest to ATH’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.4 hedge funds with bullish positions and the average amount invested in these stocks was $1135 million. That figure was $1645 million in ATH’s case. Vail Resorts, Inc. (NYSE:MTN) is the most popular stock in this table. On the other hand Tenaris S.A. (NYSE:TS) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Athene Holding Ltd. (NYSE:ATH) is more popular among hedge funds. Our overall hedge fund sentiment score for ATH is 79.8. 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 returned 22.9% in 2021 through October 1st but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on ATH as the stock returned 3.2% since the end of June (through 10/1) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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