Smart Money Has A Lot Invested In American Axle & Manufact. Holdings, Inc. (AXL)

Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis process to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.

American Axle & Manufact. Holdings, Inc. (NYSE:AXL) was in 19 hedge funds’ portfolios at the end of September. American Axle & Manufact. Holdings, Inc. shareholders have witnessed a decrease in activity from the world’s largest hedge funds lately. There were 22 hedge funds in our database with American Axle & Manufact. Holdings, Inc. positions at the end of the previous quarter. At the end of this article we will also compare American Axle & Manufact. Holdings, Inc. to other stocks including Paylocity Holding Corp (NASDAQ:PCTY), Ship Finance International Limited (NYSE:SFL), and Eagle Bancorp, Inc. (NASDAQ:EGBN) to get a better sense of its popularity.

If you’d ask most traders, hedge funds are perceived as slow, old investment vehicles of years past. While there are over an 8,000 funds with their doors open at the moment, we hone in on the crème de la crème of this group, about 700 funds. It is estimated that this group of investors administer the lion’s share of all hedge funds’ total capital, and by tracking their first-class investments, Insider Monkey has determined various investment strategies that have historically exceeded the broader indices. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points a year for a decade in their back tests.

With all of this in mind, we’re going to review the fresh action regarding American Axle & Manufact. Holdings, Inc. (NYSE:AXL).

Hedge fund activity in American Axle & Manufact. Holdings, Inc. (NYSE:AXL)

Heading into Q4, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 14% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully (or had already accumulated large positions).

Of the funds tracked by Insider Monkey, Thomas E. Claugus’ GMT Capital has the largest position in American Axle & Manufact. Holdings, Inc. (NYSE:AXL), worth close to $63.3 million, comprising 1.6% of its total 13F portfolio. The second-largest stake is held by Steve Cohen of Point72 Asset Management, with a $54 million position; 0.4% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish consist of Robert Polak’s Anchor Bolt Capital, Joel Greenblatt’s Gotham Asset Management, and Ken Griffin’s Citadel Investment Group.

Because American Axle & Manufact. Holdings, Inc. (NYSE:AXL) has experienced falling interest from the smart money, it’s easy to see that there exists a select few money managers that slashed their positions entirely last quarter. Intriguingly, Glenn Russell Dubin’s Highbridge Capital Management sold off the largest position of all the hedgies followed by Insider Monkey, comprising an estimated $5.6 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also said goodbye to its stock, about $2.2 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 3 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks similar to American Axle & Manufact. Holdings, Inc. (NYSE:AXL). These stocks are Paylocity Holding Corp (NASDAQ:PCTY), Ship Finance International Limited (NYSE:SFL), Eagle Bancorp, Inc. (NASDAQ:EGBN), and OSI Systems, Inc. (NASDAQ:OSIS). This group of stocks’ market valuations resemble American Axle & Manufact. Holdings, Inc.’s market valuation.

As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was $298 million in American Axle & Manufact. Holdings, Inc.’s case. Paylocity Holding Corp (NASDAQ:PCTY) is the most popular stock in this table. On the other hand Eagle Bancorp, Inc. (NASDAQ:EGBN) is the least popular one with only 11 bullish hedge fund positions. American Axle & Manufact. Holdings, Inc. (NYSE:AXL) is tied for the most popular stock in this group, and has far more money invested in it than any of the other mentioned stocks. This is a positive signal and makes the stock worth considering for a long position.