With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the first quarter. One of these stocks was Albemarle Corporation (NYSE:ALB).
Albemarle Corporation (NYSE:ALB) investors should pay attention to a decrease in hedge fund sentiment in recent months. ALB was in 25 hedge funds' portfolios at the end of March. There were 28 hedge funds in our database with ALB positions at the end of the previous quarter. Our calculations also showed that alb isn't among the 30 most popular stocks among hedge funds.
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 has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to take a look at the fresh hedge fund action surrounding Albemarle Corporation (NYSE:ALB).
Hedge fund activity in Albemarle Corporation (NYSE:ALB)
Heading into the second quarter of 2019, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the fourth quarter of 2018. By comparison, 23 hedge funds held shares or bullish call options in ALB a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Citadel Investment Group held the most valuable stake in Albemarle Corporation (NYSE:ALB), which was worth $50.6 million at the end of the first quarter. On the second spot was Anchor Bolt Capital which amassed $20.2 million worth of shares. Moreover, Moore Global Investments, Point72 Asset Management, and GLG Partners were also bullish on Albemarle Corporation (NYSE:ALB), allocating a large percentage of their portfolios to this stock.
Seeing as Albemarle Corporation (NYSE:ALB) has witnessed bearish sentiment from the aggregate hedge fund industry, it's safe to say that there is a sect of hedgies that decided to sell off their positions entirely last quarter. It's worth mentioning that David Cohen and Harold Levy's Iridian Asset Management dropped the largest investment of the 700 funds watched by Insider Monkey, comprising about $133.2 million in stock. Larry Robbins's fund, Glenview Capital, also sold off its stock, about $26.5 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 3 funds last quarter.
Let's now review hedge fund activity in other stocks similar to Albemarle Corporation (NYSE:ALB). We will take a look at Grupo Aval Acciones y Valores S.A. (NYSE:AVAL), Bausch Health Companies Inc. (NYSE:BHC), Andeavor Logistics LP (NYSE:ANDX), and bluebird bio Inc (NASDAQ:BLUE). This group of stocks' market caps resemble ALB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AVAL,8,15040,-1 BHC,31,1801427,-1 ANDX,6,7757,0 BLUE,25,190064,9 Average,17.5,503572,1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $504 million. That figure was $186 million in ALB's case. Bausch Health Companies Inc. (NYSE:BHC) is the most popular stock in this table. On the other hand Andeavor Logistics LP (NYSE:ANDX) is the least popular one with only 6 bullish hedge fund positions. Albemarle Corporation (NYSE:ALB) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately ALB wasn't nearly as popular as these 20 stocks and hedge funds that were betting on ALB were disappointed as the stock returned -20% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.