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A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended December 31st, so let’s proceed with the discussion of the hedge fund sentiment on AerCap Holdings N.V. (NYSE:AER).
Is AER stock a buy or sell? AerCap Holdings N.V. (NYSE:AER) was in 40 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 77. AER investors should pay attention to an increase in enthusiasm from smart money in recent months. There were 38 hedge funds in our database with AER holdings at the end of September. Our calculations also showed that AER isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).
Boykin Curry of Eagle Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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 website. Keeping this in mind let's take a look at the latest hedge fund action regarding AerCap Holdings N.V. (NYSE:AER).
Do Hedge Funds Think AER Is A Good Stock To Buy Now?
At Q4's end, a total of 40 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 5% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AER over the last 22 quarters. With the smart money's capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
The largest stake in AerCap Holdings N.V. (NYSE:AER) was held by Eagle Capital Management, which reported holding $349.5 million worth of stock at the end of December. It was followed by Lyrical Asset Management with a $239.7 million position. Other investors bullish on the company included Greenlight Capital, Basswood Capital, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Tiger Management allocated the biggest weight to AerCap Holdings N.V. (NYSE:AER), around 14.61% of its 13F portfolio. 59 North Capital is also relatively very bullish on the stock, setting aside 11.15 percent of its 13F equity portfolio to AER.
As industrywide interest jumped, some big names were leading the bulls' herd. Empyrean Capital Partners, managed by Michael A. Price and Amos Meron, established the most outsized position in AerCap Holdings N.V. (NYSE:AER). Empyrean Capital Partners had $58.4 million invested in the company at the end of the quarter. Michael Bilger's 59 North Capital also initiated a $29.9 million position during the quarter. The other funds with new positions in the stock are Len Kipp and Xavier Majic's Maple Rock Capital, Wayne Cooperman's Cobalt Capital Management, and Louis Bacon's Moore Global Investments.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as AerCap Holdings N.V. (NYSE:AER) but similarly valued. We will take a look at Janus Henderson Group plc (NYSE:JHG), Advanced Drainage Systems Inc. (NYSE:WMS), American Campus Communities, Inc. (NYSE:ACC), B2Gold Corp (NYSE:BTG), Oshkosh Corporation (NYSE:OSK), Polaris Inc. (NYSE:PII), and Companhia de Saneamento Básico do Estado de São Paulo - SABESP (NYSE:SBS). All of these stocks' market caps resemble AER's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position JHG,22,780607,1 WMS,25,965545,0 ACC,15,242986,-6 BTG,22,420163,5 OSK,40,405765,11 PII,31,486896,-8 SBS,12,259191,1 Average,23.9,508736,0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.9 hedge funds with bullish positions and the average amount invested in these stocks was $509 million. That figure was $1395 million in AER's case. Oshkosh Corporation (NYSE:OSK) is the most popular stock in this table. On the other hand Companhia de Saneamento Básico do Estado de São Paulo - SABESP (NYSE:SBS) is the least popular one with only 12 bullish hedge fund positions. AerCap Holdings N.V. (NYSE:AER) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AER is 72.6. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on AER as the stock returned 32.3% since the end of Q4 (through 3/19) 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.