Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. That’s why we pay special attention to hedge fund activity in these stocks.
Is Getty Realty Corp. (NYSE:GTY) a buy here? The best stock pickers are in a bearish mood. The number of bullish hedge fund positions shrunk by 5 in recent months. The shares of Getty Realty Corp. (NYSE:GTY) witnessed a similar trading environment, with its stock losing 3.42% value during the third quarter. In order to understand more about the hedge fund sentiment, we will discuss hedge funds that held positions in Getty Realty Corp. (NYSE:GTY), at the end of September.
To find out more about the hedge fund behavior towards companies with similar market caps, we will compare Getty Realty Corp. (NYSE:GTY) to other stocks, including Cedar Realty Trust Inc (NYSE:CDR), Silver Standard Resources Inc. (USA) (NASDAQ:SSRI), and Tarena International Inc(ADR) (NASDAQ:TEDU) to get a better sense of its popularity.
Follow Getty Realty Corp (NYSE:GTY)
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In the financial world, there are dozens of signals stock traders employ to grade their stock investments. A couple of the less utilized signals are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the elite money managers can outpace the market by a very impressive margin (see the details here).
Now, we’re going to take a look at the new action regarding Getty Realty Corp. (NYSE:GTY).
What have hedge funds been doing with Getty Realty Corp. (NYSE:GTY)?
At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 50% from the previous quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the number one position in Getty Realty Corp. (NYSE:GTY), worth close to $7.5 million, comprising less than 0.1% of its total 13F portfolio. Coming in second is MFP Investors, managed by Michael Price, which holds a $5.6 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism contain Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors, and Chao Ku’s Nine Chapters Capital Management.
Due to the fact that Getty Realty Corp. (NYSE:GTY) has witnessed a declination in interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few fund managers that elected to cut their full holdings heading into Q4. Intriguingly, Howard Marks’s Oaktree Capital Management dropped the biggest stake of the “upper crust” of funds monitored by Insider Monkey, comprising about $13 million in call options., and Matthew Hulsizer’s PEAK6 Capital Management was right behind this move, as the fund dropped about $0.4 million worth of shares. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 5 funds heading into Q4.
Let’s check out hedge fund activity in other stocks similar to Getty Realty Corp. (NYSE:GTY). These stocks are Cedar Realty Trust Inc (NYSE:CDR), Silver Standard Resources Inc. (USA) (NASDAQ:SSRI), Tarena International Inc(ADR) (NASDAQ:TEDU), and Winthrop Realty Trust (NYSE:FUR). This group of stocks’ market valuations are similar to Getty Realty Corp. (NYSE:GTY)’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CDR | 9 | 17751 | -2 |
| SSRI | 14 | 44896 | 1 |
| TEDU | 5 | 7686 | -2 |
| FUR | 23 | 134179 | -1 |
As you can see, these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $15 million in Getty Realty Corp. (NYSE:GTY)’s case. Winthrop Realty Trust (NYSE:FUR) is the most popular stock in this table. On the other hand, Tarena International Inc(ADR) (NASDAQ:TEDU) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks, Getty Realty Corp. (NYSE:GTY) is even less popular than Tarena International Inc(ADR) (NASDAQ:TEDU). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.
