You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Is Ambev SA (ADR) (NYSE:ABEV) a buy right now? Prominent investors are becoming hopeful. The number of bullish hedge fund bets rose by 2 recently. ABEV was in 18 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with ABEV positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Union Pacific Corporation (NYSE:UNP), Banco Santander, S.A. (ADR) (NYSE:SAN), and Goldman Sachs Group, Inc. (NYSE:GS) to gather more data points.
Keeping this in mind, we’re going to take a gander at the key action surrounding Ambev SA (ADR) (NYSE:ABEV).
What does the smart money think about Ambev SA (ADR) (NYSE:ABEV)?
At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the previous quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the most valuable position in Ambev SA (ADR) (NYSE:ABEV). Arrowstreet Capital has an $292.2 million position in the stock, comprising 1.4% of its 13F portfolio. The second most bullish fund manager is Ken Fisher of Fisher Asset Management, with an $61.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish include William von Mueffling’s Cantillon Capital Management, Cliff Asness’ AQR Capital Management and Jim Simons’ Renaissance Technologies.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. OZ Management, managed by Daniel S. Och, created the most outsized position in Ambev SA (ADR) (NYSE:ABEV). OZ Management had $31.7 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also initiated an $24.5 million position during the quarter. The other funds with brand new ABEV positions are Matthew Tewksbury’s Stevens Capital Management and Chao Ku’s Nine Chapters Capital Management.
Let’s go over hedge fund activity in other stocks similar to Ambev SA (ADR) (NYSE:ABEV). We will take a look at Union Pacific Corporation (NYSE:UNP), Banco Santander, S.A. (ADR) (NYSE:SAN), Goldman Sachs Group, Inc. (NYSE:GS), and American Express Company (NYSE:AXP). This group of stocks’ market valuations match ABEV’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UNP | 55 | 1514406 | -9 |
| SAN | 16 | 144983 | -7 |
| GS | 63 | 5571714 | -4 |
| AXP | 52 | 16119933 | -5 |
As you can see these stocks had an average of 46.5 hedge funds with bullish positions and the average amount invested in these stocks was $5838 million. That figure was $608 million in ABEV’s case. Goldman Sachs Group, Inc. (NYSE:GS) is the most popular stock in this table. On the other hand Banco Santander, S.A. (ADR) (NYSE:SAN) is the least popular one with only 16 bullish hedge fund positions. Ambev SA (ADR) (NYSE:ABEV) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard GS might be a better candidate to consider a long position.