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Is Altria Group Inc (NYSE:MO) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Altria Group Inc (NYSE:MO) investors should pay attention to an increase in hedge fund sentiment in recent months. Our calculations also showed that MO isn't among the 30 most popular stocks among hedge funds (see the video at the end of this article).
Today there are a large number of signals investors put to use to analyze stocks. A couple of the less known signals are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the best money managers can beat the S&P 500 by a significant amount (see the details here).
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to go over the fresh hedge fund action encompassing Altria Group Inc (NYSE:MO).
What have hedge funds been doing with Altria Group Inc (NYSE:MO)?
At Q2's end, a total of 38 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from the previous quarter. On the other hand, there were a total of 35 hedge funds with a bullish position in MO a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds, Gardner Russo & Gardner held the most valuable stake in Altria Group Inc (NYSE:MO), which was worth $236.3 million at the end of the second quarter. On the second spot was AQR Capital Management which amassed $223.8 million worth of shares. Moreover, Millennium Management, Adage Capital Management, and Citadel Investment Group were also bullish on Altria Group Inc (NYSE:MO), allocating a large percentage of their portfolios to this stock.
Now, specific money managers have jumped into Altria Group Inc (NYSE:MO) headfirst. Renaissance Technologies, managed by Jim Simons, created the most valuable position in Altria Group Inc (NYSE:MO). Renaissance Technologies had $34.7 million invested in the company at the end of the quarter. John Overdeck and David Siegel's Two Sigma Advisors also made a $17 million investment in the stock during the quarter. The following funds were also among the new MO investors: Michael Kharitonov and Jon David McAuliffe's Voleon Capital, Matthew Tewksbury's Stevens Capital Management, and Steve Cohen's Point72 Asset Management.
Let's check out hedge fund activity in other stocks similar to Altria Group Inc (NYSE:MO). We will take a look at American Tower Corporation (REIT) (NYSE:AMT), ASML Holding N.V. (NASDAQ:ASML), Charter Communications, Inc. (NASDAQ:CHTR), and Banco Santander (Brasil) SA (NYSE:BSBR). This group of stocks' market values are similar to MO's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMT,42,3149112,3 ASML,12,698865,-3 CHTR,66,7511059,-1 BSBR,11,179610,1 Average,32.75,2884662,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.75 hedge funds with bullish positions and the average amount invested in these stocks was $2885 million. That figure was $942 million in MO's case. Charter Communications, Inc. (NASDAQ:CHTR) is the most popular stock in this table. On the other hand Banco Santander (Brasil) SA (NYSE:BSBR) is the least popular one with only 11 bullish hedge fund positions. Altria Group Inc (NYSE:MO) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately MO wasn't nearly as popular as these 20 stocks and hedge funds that were betting on MO were disappointed as the stock returned -12% during the third quarter 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 many of these stocks already outperformed the market so far this year.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
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