We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards Ameriprise Financial, Inc. (NYSE:AMP) and determine whether hedge funds skillfully traded this stock.
Ameriprise Financial, Inc. (NYSE:AMP) has experienced an increase in enthusiasm from smart money of late. Ameriprise Financial, Inc. (NYSE:AMP) was in 40 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 39. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that AMP 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 recent hedge fund action encompassing Ameriprise Financial, Inc. (NYSE:AMP).
Phillip Gross of Adage Capital
Do Hedge Funds Think AMP Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from one quarter earlier. On the other hand, there were a total of 29 hedge funds with a bullish position in AMP a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Lyrical Asset Management was the largest shareholder of Ameriprise Financial, Inc. (NYSE:AMP), with a stake worth $428.9 million reported as of the end of September. Trailing Lyrical Asset Management was Viking Global, which amassed a stake valued at $370 million. Millennium Management, Balyasny Asset Management, and Adage Capital Management 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 5.5% of its 13F portfolio. Prana Capital Management is also relatively very bullish on the stock, dishing out 2.01 percent of its 13F equity portfolio to AMP.
Now, key money managers have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, initiated the most valuable position in Ameriprise Financial, Inc. (NYSE:AMP). Point72 Asset Management had $24.2 million invested in the company at the end of the quarter. Peter Seuss’s Prana Capital Management also made a $22.9 million investment in the stock during the quarter. The following funds were also among the new AMP investors: Louis Bacon’s Moore Global Investments, Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Ameriprise Financial, Inc. (NYSE:AMP) but similarly valued. We will take a look at Willis Towers Watson Public Limited Company (NASDAQ:WLTW), Garmin Ltd. (NYSE:GRMN), TELUS Corporation (NYSE:TU), Paycom Software Inc (NYSE:PAYC), ANSYS, Inc. (NASDAQ:ANSS), Fastenal Company (NASDAQ:FAST), and ArcelorMittal (NYSE:MT). All of these stocks’ market caps match AMP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WLTW | 75 | 5055019 | 5 |
| GRMN | 30 | 465208 | 5 |
| TU | 12 | 141291 | -1 |
| PAYC | 40 | 1424558 | 1 |
| ANSS | 38 | 1493156 | -8 |
| FAST | 30 | 609114 | 5 |
| MT | 20 | 1012692 | -2 |
| Average | 35 | 1457291 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35 hedge funds with bullish positions and the average amount invested in these stocks was $1457 million. That figure was $1309 million in AMP’s case. Willis Towers Watson Public Limited Company (NASDAQ:WLTW) is the most popular stock in this table. On the other hand TELUS Corporation (NYSE:TU) is the least popular one with only 12 bullish hedge fund positions. Ameriprise Financial, Inc. (NYSE:AMP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AMP 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. Hedge funds were also right about betting on AMP as the stock returned 15.6% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
