We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn't mean that they don't have occasional colossal losses; they do (like Peltz's recent General Electric losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Albany International Corp. (NYSE:AIN).
Albany International Corp. (NYSE:AIN) shareholders have witnessed an increase in support from the world's most elite money managers lately. AIN was in 16 hedge funds' portfolios at the end of the first quarter of 2019. There were 11 hedge funds in our database with AIN positions at the end of the previous quarter. Our calculations also showed that AIN isn't among the 30 most popular stocks among hedge funds.
To most stock holders, hedge funds are perceived as worthless, outdated investment vehicles of years past. While there are more than 8000 funds trading today, Our experts choose to focus on the upper echelon of this group, about 750 funds. These investment experts direct most of the hedge fund industry's total asset base, and by shadowing their first-class picks, Insider Monkey has figured out many investment strategies that have historically defeated the market. Insider Monkey's flagship hedge fund strategy outstripped the S&P 500 index by around 5 percentage points a year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
We're going to take a look at the recent hedge fund action surrounding Albany International Corp. (NYSE:AIN).
Hedge fund activity in Albany International Corp. (NYSE:AIN)
Heading into the second quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 45% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards AIN over the last 15 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
The largest stake in Albany International Corp. (NYSE:AIN) was held by Renaissance Technologies, which reported holding $41.9 million worth of stock at the end of March. It was followed by Millennium Management with a $17.1 million position. Other investors bullish on the company included Hudson Bay Capital Management, Arrowstreet Capital, and GAMCO Investors.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Hudson Bay Capital Management, managed by Sander Gerber, assembled the largest position in Albany International Corp. (NYSE:AIN). Hudson Bay Capital Management had $7.3 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital also made a $4 million investment in the stock during the quarter. The other funds with new positions in the stock are Benjamin A. Smith's Laurion Capital Management, Andrew Feldstein and Stephen Siderow's Blue Mountain Capital, and Dmitry Balyasny's Balyasny Asset Management.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Albany International Corp. (NYSE:AIN) but similarly valued. We will take a look at Oi SA (NYSE:OIBR), Acacia Communications, Inc. (NASDAQ:ACIA), CoreCivic, Inc. (NYSE:CXW), and SVMK Inc. (NASDAQ:SVMK). This group of stocks' market values resemble AIN's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OIBR,21,826627,0 ACIA,31,319611,11 CXW,14,145281,-7 SVMK,20,538478,9 Average,21.5,457499,3.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $457 million. That figure was $87 million in AIN's case. Acacia Communications, Inc. (NASDAQ:ACIA) is the most popular stock in this table. On the other hand CoreCivic, Inc. (NYSE:CXW) is the least popular one with only 14 bullish hedge fund positions. Albany International Corp. (NYSE:AIN) 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on AIN as the stock returned 11.6% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.