Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of March. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Apollo Global Management LLC (NYSE:APO), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Apollo Global Management LLC (NYSE:APO) investors should pay attention to a decrease in enthusiasm from smart money of late. APO was in 18 hedge funds' portfolios at the end of March. There were 22 hedge funds in our database with APO holdings at the end of the previous quarter. Our calculations also showed that apo isn't among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to take a glance at the new hedge fund action encompassing Apollo Global Management LLC (NYSE:APO).
What does the smart money think about Apollo Global Management LLC (NYSE:APO)?
At the end of the first quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -18% from one quarter earlier. On the other hand, there were a total of 22 hedge funds with a bullish position in APO a year ago. With the smart money's sentiment swirling, there exists a few key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
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 LLC (NYSE:APO). Tiger Global Management has a $1.064 billion position in the stock, comprising 5.9% of its 13F portfolio. Sitting at the No. 2 spot is Mick Hellman of HMI Capital, with a $179.8 million position; 21.3% of its 13F portfolio is allocated to the company. Other peers that are bullish comprise Robert Joseph Caruso's Select Equity Group, Tom Gayner's Markel Gayner Asset Management and Julian Robertson's Tiger Management.
Seeing as Apollo Global Management LLC (NYSE:APO) has faced declining sentiment from the aggregate hedge fund industry, logic holds that there was a specific group of funds who were dropping their entire stakes heading into Q3. At the top of the heap, Paul Marshall and Ian Wace's Marshall Wace LLP cut the biggest position of all the hedgies tracked by Insider Monkey, worth close to $1.2 million in stock. Bradley LouisáRadoff's fund, Fondren Management, also dropped its stock, about $1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 4 funds heading into Q3.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Apollo Global Management LLC (NYSE:APO) but similarly valued. We will take a look at StoneCo Ltd. (NASDAQ:STNE), E*TRADE Financial Corporation (NASDAQ:ETFC), Raymond James Financial, Inc. (NYSE:RJF), and Regency Centers Corp (NASDAQ:REG). This group of stocks' market valuations resemble APO's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position STNE,23,1735395,3 ETFC,43,1473468,2 RJF,35,794772,10 REG,17,397323,2 Average,29.5,1100240,4.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.5 hedge funds with bullish positions and the average amount invested in these stocks was $1100 million. That figure was $1406 million in APO's case. E*TRADE Financial Corporation (NASDAQ:ETFC) is the most popular stock in this table. On the other hand Regency Centers Corp (NASDAQ:REG) is the least popular one with only 17 bullish hedge fund positions. Apollo Global Management LLC (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 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. A small number of hedge funds were also right about betting on APO as the stock returned 10.1% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.