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Hedge Fund Consensus Stocks vs. Apollo Global Management, Inc. (APO) In 2019

Reymerlyn Martin

2018's fourth quarter was a rough one for investors and many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 4.8% during 2018 and average hedge fund losing about 1%. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by more than 6 percentage points, as investors fled less-known quantities for safe havens. Luckily hedge funds were shifting their holdings into large-cap stocks. The 20 most popular hedge fund stocks actually generated an average return of 41.3% in 2019 and outperformed the S&P 500 ETF by more than 10 percentage points. In this article we will study how hedge fund sentiment towards Apollo Global Management, Inc. (NYSE:APO) changed during the third quarter and how the stock performed in comparison to hedge fund consensus stocks.

Is Apollo Global Management, Inc. (NYSE:APO) a cheap stock to buy now? Investors who are in the know are getting more bullish. The number of bullish hedge fund positions improved by 1 recently. Our calculations also showed that APO isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video at the end of this article for Q2 rankings). APO was in 24 hedge funds' portfolios at the end of September. There were 23 hedge funds in our database with APO holdings at the end of the previous quarter.

In today’s marketplace there are tons of signals stock traders have at their disposal to grade their stock investments. Some of the most useful signals are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the top fund managers can trounce the S&P 500 by a superb amount (see the details here).

[caption id="attachment_26088" align="aligncenter" width="600"] Chase Coleman of Tiger Global[/caption]

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager's investor letter and the stock is still extremely cheap despite already gaining 20 percent. Now let's take a look at the key hedge fund action encompassing Apollo Global Management, Inc. (NYSE:APO).

What does smart money think about Apollo Global Management, Inc. (NYSE:APO)?

Heading into the fourth quarter of 2019, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from the previous quarter. The graph below displays the number of hedge funds with bullish position in APO over the last 17 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Tiger Global Management, managed by Chase Coleman, holds the largest position in Apollo Global Management, Inc. (NYSE:APO). Tiger Global Management has a $1.4244 billion position in the stock, comprising 7.5% of its 13F portfolio. The second largest stake is held by Robert Pohly of Samlyn Capital, with a $56.3 million position; 1.4% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism encompass Louis Bacon's Moore Global Investments, Tom Gayner's Markel Gayner Asset Management and Robert Joseph Caruso's Select Equity Group. In terms of the portfolio weights assigned to each position Tiger Global Management allocated the biggest weight to Apollo Global Management, Inc. (NYSE:APO), around 7.54% of its 13F portfolio. Concourse Capital Management is also relatively very bullish on the stock, setting aside 6.57 percent of its 13F equity portfolio to APO.

As industrywide interest jumped, specific money managers have been driving this bullishness. Samlyn Capital, managed by Robert Pohly, created the most valuable position in Apollo Global Management, Inc. (NYSE:APO). Samlyn Capital had $56.3 million invested in the company at the end of the quarter. Louis Bacon's Moore Global Investments also made a $42.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Clint Carlson's Carlson Capital, Joe DiMenna's ZWEIG DIMENNA PARTNERS, and Steve Cohen's Point72 Asset Management.

Let's also examine hedge fund activity in other stocks similar to Apollo Global Management, Inc. (NYSE:APO). These stocks are TransUnion (NYSE:TRU), PagSeguro Digital Ltd. (NYSE:PAGS), CenterPoint Energy, Inc. (NYSE:CNP), and Magellan Midstream Partners, L.P. (NYSE:MMP). This group of stocks' market caps are closest to APO's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TRU,34,1040934,4 PAGS,35,1381252,5 CNP,27,1089888,-2 MMP,12,55553,2 Average,27,891907,2.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $892 million. That figure was $1733 million in APO's case. PagSeguro Digital Ltd. (NYSE:PAGS) is the most popular stock in this table. On the other hand Magellan Midstream Partners, L.P. (NYSE:MMP) is the least popular one with only 12 bullish hedge fund positions. Apollo Global Management, Inc. (NYSE:APO) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. A small number of hedge funds were also right about betting on APO as the stock returned 106.5% in 2019 and outclassed the market by an even larger margin. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

5 Most Popular Stocks Among Hedge Funds

Disclosure: None. This article was originally published at Insider Monkey.

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