Did Hedge Funds Drop The Ball On SITE Centers Corp. (SITC)?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of SITE Centers Corp. (NYSE:SITC) based on that data and determine whether they were really smart about the stock.

SITE Centers Corp. (NYSE:SITC) has experienced a decrease in enthusiasm from smart money of late. SITC was in 21 hedge funds’ portfolios at the end of March. There were 22 hedge funds in our database with SITC positions at the end of the previous quarter. Our calculations also showed that SITC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

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 monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

At Insider Monkey we scour multiple sources to uncover the next great investment idea. Cannabis stocks are roaring back in 2020, so we are checking out this under-the-radar stock. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. Now we’re going to review the key hedge fund action encompassing SITE Centers Corp. (NYSE:SITC).

Hedge fund activity in SITE Centers Corp. (NYSE:SITC)

At Q1’s end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SITC over the last 18 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).

More specifically, Citadel Investment Group was the largest shareholder of SITE Centers Corp. (NYSE:SITC), with a stake worth $24.6 million reported as of the end of September. Trailing Citadel Investment Group was Balyasny Asset Management, which amassed a stake valued at $5.1 million. Capital Growth Management, D E Shaw, and Renaissance Technologies were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Capital Growth Management allocated the biggest weight to SITE Centers Corp. (NYSE:SITC), around 0.64% of its 13F portfolio. Balyasny Asset Management is also relatively very bullish on the stock, setting aside 0.06 percent of its 13F equity portfolio to SITC.

Judging by the fact that SITE Centers Corp. (NYSE:SITC) has faced falling interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few money managers who were dropping their full holdings in the first quarter. Intriguingly, Stuart J. Zimmer’s Zimmer Partners cut the largest investment of the “upper crust” of funds monitored by Insider Monkey, valued at about $15.8 million in stock. Matthew Crandall Gilman’s fund, Hill Winds Capital, also sold off its stock, about $5.8 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 1 funds in the first quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as SITE Centers Corp. (NYSE:SITC) but similarly valued. We will take a look at Grupo Financiero Galicia S.A. (NASDAQ:GGAL), Calavo Growers, Inc. (NASDAQ:CVGW), NextCure, Inc. (NASDAQ:NXTC), and Red Rock Resorts, Inc. (NASDAQ:RRR). This group of stocks’ market values are closest to SITC’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $117 million. That figure was $47 million in SITC’s case. Red Rock Resorts, Inc. (NASDAQ:RRR) is the most popular stock in this table. On the other hand Grupo Financiero Galicia S.A. (NASDAQ:GGAL) is the least popular one with only 6 bullish hedge fund positions. SITE Centers Corp. (NYSE:SITC) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 18.6% in 2020 through July 27th but still beat the market by 17.1 percentage points. Hedge funds were also right about betting on SITC as the stock returned 34.9% since Q1 and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Disclosure: None. This article was originally published at Insider Monkey.