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. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded American Express Company (NYSE:AXP) and determine whether the smart money was really smart about this stock.
Is American Express Company (NYSE:AXP) the right pick for your portfolio? Investors who are in the know were betting on the stock. The number of bullish hedge fund positions increased by 5 lately. American Express Company (NYSE:AXP) was in 57 hedge funds’ portfolios at the end of September. The all time high for this statistic is 60. Our calculations also showed that AXP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind we’re going to analyze the latest hedge fund action encompassing American Express Company (NYSE:AXP).
Dmitry Balyasny of Balyasny Asset Management
Do Hedge Funds Think AXP Is A Good Stock To Buy Now?
At the end of September, a total of 57 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in AXP over the last 25 quarters. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
Among these funds, Berkshire Hathaway held the most valuable stake in American Express Company (NYSE:AXP), which was worth $25399.3 million at the end of the third quarter. On the second spot was Fisher Asset Management which amassed $2617.5 million worth of shares. Arrowstreet Capital, GAMCO Investors, and Citadel Investment Group 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 Aquamarine Capital Management allocated the biggest weight to American Express Company (NYSE:AXP), around 17.25% of its 13F portfolio. Berkshire Hathaway is also relatively very bullish on the stock, designating 8.66 percent of its 13F equity portfolio to AXP.
As aggregate interest increased, specific money managers were leading the bulls’ herd. Junto Capital Management, managed by James Parsons, created the most valuable position in American Express Company (NYSE:AXP). Junto Capital Management had $82.7 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $46.3 million investment in the stock during the quarter. The other funds with brand new AXP positions are Usman Waheed’s Strycker View Capital, Kamyar Khajavi’s MIK Capital, and Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management.
Let’s also examine hedge fund activity in other stocks similar to American Express Company (NYSE:AXP). We will take a look at Bristol Myers Squibb Company (NYSE:BMY), Starbucks Corporation (NASDAQ:SBUX), Raytheon Technologies Corp (NYSE:RTX), The Boeing Company (NYSE:BA), Union Pacific Corporation (NYSE:UNP), BlackRock, Inc. (NYSE:BLK), and The Goldman Sachs Group, Inc. (NYSE:GS). This group of stocks’ market valuations match AXP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BMY | 74 | 4758551 | 1 |
| SBUX | 58 | 4807317 | -5 |
| RTX | 48 | 2259405 | -5 |
| BA | 50 | 1431242 | -9 |
| UNP | 63 | 4886422 | -6 |
| BLK | 44 | 1085328 | -3 |
| GS | 74 | 5451988 | 13 |
| Average | 58.7 | 3525750 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 58.7 hedge funds with bullish positions and the average amount invested in these stocks was $3526 million. That figure was $29603 million in AXP’s case. Bristol Myers Squibb Company (NYSE:BMY) is the most popular stock in this table. On the other hand BlackRock, Inc. (NYSE:BLK) is the least popular one with only 44 bullish hedge fund positions. American Express Company (NYSE:AXP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AXP is 60.2. 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 gained 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on AXP as the stock returned 7.9% since the end of the third quarter (through 1/31) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
