In this article we will take a look at whether hedge funds think Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) is 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, unconventional data sources, 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.
Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) investors should pay attention to an increase in support from the world's most elite money managers of late. Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) was in 5 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 9. There were 4 hedge funds in our database with AVAL holdings at the end of December. Our calculations also showed that AVAL isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Ryan Tolkin, CIO of Schonfeld Strategic Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind let's take a look at the fresh hedge fund action regarding Grupo Aval Acciones y Valores S.A. (NYSE:AVAL).
Do Hedge Funds Think AVAL Is A Good Stock To Buy Now?
At the end of March, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from one quarter earlier. On the other hand, there were a total of 5 hedge funds with a bullish position in AVAL a year ago. With hedge funds' capital changing hands, there exists an "upper tier" of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the biggest position in Grupo Aval Acciones y Valores S.A. (NYSE:AVAL). Renaissance Technologies has a $7.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is D E Shaw, led by D. E. Shaw, holding a $1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other professional money managers that are bullish include Thomas Bailard's Bailard Inc, Ken Griffin's Citadel Investment Group and Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors. 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 0.03% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to AVAL.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, established the biggest position in Grupo Aval Acciones y Valores S.A. (NYSE:AVAL). Citadel Investment Group had $0.5 million invested in the company at the end of the quarter.
Let's now take a look at 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. These stocks are Ascendis Pharma A/S (NASDAQ:ASND), TopBuild Corp (NYSE:BLD), Lumentum Holdings Inc (NASDAQ:LITE), Coty Inc (NYSE:COTY), Denali Therapeutics Inc. (NASDAQ:DNLI), TFI International Inc. (NYSE:TFII), and Cullen/Frost Bankers, Inc. (NYSE:CFR). All of these stocks' market caps match AVAL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ASND,28,2078115,-3 BLD,18,103995,-1 LITE,31,329570,-8 COTY,25,262735,3 DNLI,26,250609,6 TFII,19,164356,9 CFR,11,18887,-6 Average,22.6,458324,0 [/table]
As you can see these stocks had an average of 22.6 hedge funds with bullish positions and the average amount invested in these stocks was $458 million. That figure was $10 million in AVAL's case. Lumentum Holdings Inc (NASDAQ:LITE) is the most popular stock in this table. On the other hand Cullen/Frost Bankers, Inc. (NYSE:CFR) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) is even less popular than CFR. Our overall hedge fund sentiment score for AVAL is 22.7. 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 dodged a bullet by taking a bearish stance towards AVAL. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th but managed to beat the market again by 6.1 percentage points. Unfortunately AVAL wasn't nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); AVAL investors were disappointed as the stock returned -6.1% since the end of the first quarter (through 6/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
