Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Alexandria Real Estate Equities Inc (NYSE:ARE) in this article.
Alexandria Real Estate Equities Inc (NYSE:ARE) investors should be aware of an increase in enthusiasm from smart money recently. Alexandria Real Estate Equities Inc (NYSE:ARE) was in 28 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 29. Our calculations also showed that ARE isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Chris Hohn
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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 peek at the new hedge fund action regarding Alexandria Real Estate Equities Inc (NYSE:ARE).
Do Hedge Funds Think ARE Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from one quarter earlier. On the other hand, there were a total of 18 hedge funds with a bullish position in ARE a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Stuart J. Zimmer’s Zimmer Partners has the largest position in Alexandria Real Estate Equities Inc (NYSE:ARE), worth close to $241.5 million, comprising 3.2% of its total 13F portfolio. Sitting at the No. 2 spot is Millennium Management, led by Israel Englander, holding a $96.2 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions consist of Ken Griffin’s Citadel Investment Group, and Chris Hohn’s TCI Fund Management. In terms of the portfolio weights assigned to each position Masterton Capital Management allocated the biggest weight to Alexandria Real Estate Equities Inc (NYSE:ARE), around 6.38% of its 13F portfolio. Zimmer Partners is also relatively very bullish on the stock, earmarking 3.25 percent of its 13F equity portfolio to ARE.
With a general bullishness amongst the heavyweights, some big names have jumped into Alexandria Real Estate Equities Inc (NYSE:ARE) headfirst. TCI Fund Management, managed by Chris Hohn, assembled the biggest position in Alexandria Real Estate Equities Inc (NYSE:ARE). TCI Fund Management had $29.7 million invested in the company at the end of the quarter. Chris Rokos’s Rokos Capital Management also made a $18.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Stuart J. Zimmer’s Zimmer Partners, Frank Fu’s CaaS Capital, and Anand Parekh’s Alyeska Investment Group.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Alexandria Real Estate Equities Inc (NYSE:ARE) but similarly valued. These stocks are Rogers Communications Inc. (NYSE:RCI), Sirius XM Holdings Inc (NASDAQ:SIRI), Genmab A/S (NASDAQ:GMAB), Ball Corporation (NYSE:BLL), West Pharmaceutical Services Inc. (NYSE:WST), RingCentral Inc (NYSE:RNG), and Carnival Corporation & plc (NYSE:CUK). This group of stocks’ market caps match ARE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RCI | 17 | 357300 | -1 |
| SIRI | 26 | 577536 | 2 |
| GMAB | 9 | 116722 | -4 |
| BLL | 44 | 1570958 | 6 |
| WST | 31 | 562904 | 5 |
| RNG | 47 | 3285023 | -4 |
| CUK | 10 | 236979 | 6 |
| Average | 26.3 | 958203 | 1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.3 hedge funds with bullish positions and the average amount invested in these stocks was $958 million. That figure was $584 million in ARE’s case. RingCentral Inc (NYSE:RNG) is the most popular stock in this table. On the other hand Genmab A/S (NASDAQ:GMAB) is the least popular one with only 9 bullish hedge fund positions. Alexandria Real Estate Equities Inc (NYSE:ARE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ARE is 60. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on ARE as the stock returned 11.5% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Alexandria Real Estate Equities Inc. (NYSE:ARE)
Follow Alexandria Real Estate Equities Inc. (NYSE:ARE)
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Disclosure: None. This article was originally published at Insider Monkey.
