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In this article we will analyze whether Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) was in 4 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 9. AVAL has experienced a decrease in activity from the world's largest hedge funds lately. There were 9 hedge funds in our database with AVAL holdings at the end of June. Our calculations also showed that AVAL isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of methods stock market investors can use to evaluate publicly traded companies. A duo of the most underrated methods are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace the broader indices by a superb margin (see the details here).
David Siegel of Two Sigma Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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. Now let's take a glance at the latest hedge fund action encompassing Grupo Aval Acciones y Valores S.A. (NYSE:AVAL).
What does smart money think about Grupo Aval Acciones y Valores S.A. (NYSE:AVAL)?
At third quarter's end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -56% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards AVAL over the last 21 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the biggest position in Grupo Aval Acciones y Valores S.A. (NYSE:AVAL). Renaissance Technologies has a $7.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies's heels is D E Shaw, led by D. E. Shaw, holding a $1.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions contain Thomas Bailard's Bailard Inc, John Overdeck and David Siegel's Two Sigma Advisors and . In terms of the portfolio weights assigned to each position Bailard Inc allocated the biggest weight to Grupo Aval Acciones y Valores S.A. (NYSE:AVAL), around 0.04% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to AVAL.
Due to the fact that Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) has witnessed declining sentiment from the smart money, it's easy to see that there was a specific group of funds that decided to sell off their full holdings by the end of the third quarter. Intriguingly, Paul Marshall and Ian Wace's Marshall Wace LLP dropped the largest stake of the 750 funds tracked by Insider Monkey, valued at about $0.7 million in stock, and Donald Sussman's Paloma Partners was right behind this move, as the fund dropped about $0.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 5 funds by the end of the third quarter.
Let's now review 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. We will take a look at Sonoco Products Company (NYSE:SON), Blueprint Medicines Corporation (NASDAQ:BPMC), ITT Inc. (NYSE:ITT), BlackLine, Inc. (NASDAQ:BL), Eastgroup Properties Inc (NYSE:EGP), Ingredion Incorporated (NYSE:INGR), and First Industrial Realty Trust, Inc. (NYSE:FR). This group of stocks' market values are closest to AVAL's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SON,29,149777,4 BPMC,34,1220886,-4 ITT,30,477657,5 BL,17,233073,-1 EGP,10,51895,-4 INGR,23,243468,1 FR,26,418925,-4 Average,24.1,399383,-0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.1 hedge funds with bullish positions and the average amount invested in these stocks was $399 million. That figure was $9 million in AVAL's case. Blueprint Medicines Corporation (NASDAQ:BPMC) is the most popular stock in this table. On the other hand Eastgroup Properties Inc (NYSE:EGP) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) is even less popular than EGP. Our overall hedge fund sentiment score for AVAL is 13.3. 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. Hedge funds clearly dropped the ball on AVAL as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on AVAL as the stock returned 22.3% since Q3 (through November 27th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.