Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds' portfolio positions as of September 30th. In this article we are going to take a look at smart money sentiment towards Grupo Aval Acciones y Valores S.A. (NYSE:AVAL).
Is Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) a healthy stock for your portfolio? Investors who are in the know are in an optimistic mood. The number of long hedge fund positions went up by 2 in recent months. Our calculations also showed that AVAL isn't among the 30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We're going to take a look at the key hedge fund action regarding Grupo Aval Acciones y Valores S.A. (NYSE:AVAL).
Hedge fund activity in Grupo Aval Acciones y Valores S.A. (NYSE:AVAL)
At Q3's end, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards AVAL over the last 13 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
The largest stake in Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) was held by Prince Street Capital Management, which reported holding $7.7 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $6.2 million position. Other investors bullish on the company included Millennium Management, D E Shaw, and Marshall Wace LLP.
As one would reasonably expect, some big names were leading the bulls' herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the biggest position in Grupo Aval Acciones y Valores S.A. (NYSE:AVAL). Marshall Wace LLP had $0.7 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also initiated a $0.2 million position during the quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) but similarly valued. These stocks are WEX Inc (NYSE:WEX), Robert Half International Inc. (NYSE:RHI), Allegion plc (NYSE:ALLE), and Qiagen NV (NASDAQ:QGEN). All of these stocks' market caps resemble AVAL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WEX,28,561491,0 RHI,28,541405,9 ALLE,15,554077,3 QGEN,24,415251,2 Average,23.75,518056,3.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.75 hedge funds with bullish positions and the average amount invested in these stocks was $518 million. That figure was $19 million in AVAL's case. WEX Inc (NYSE:WEX) is the most popular stock in this table. On the other hand Allegion plc (NYSE:ALLE) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) is even less popular than ALLE. Considering that hedge funds aren't fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn't behind this stock. This isn't necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Disclosure: None. This article was originally published at Insider Monkey.