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 Healthcare Realty Trust Inc (NYSE:HR) based on that data and determine whether they were really smart about the stock.
Healthcare Realty Trust Inc (NYSE:HR) investors should pay attention to a decrease in support from the world’s most elite money managers lately. Our calculations also showed that HR 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.
According to most traders, hedge funds are viewed as worthless, outdated investment vehicles of yesteryear. While there are greater than 8000 funds in operation at the moment, Our experts hone in on the masters of this club, around 850 funds. These investment experts handle most of all hedge funds’ total asset base, and by paying attention to their unrivaled investments, Insider Monkey has figured out several investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
David Harding of Winton Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a gander at the key hedge fund action encompassing Healthcare Realty Trust Inc (NYSE:HR).
Hedge fund activity in Healthcare Realty Trust Inc (NYSE:HR)
At the end of the first quarter, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in HR over the last 18 quarters. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Among these funds, Citadel Investment Group held the most valuable stake in Healthcare Realty Trust Inc (NYSE:HR), which was worth $13.3 million at the end of the third quarter. On the second spot was Winton Capital Management which amassed $8.4 million worth of shares. Renaissance Technologies, Impax Asset Management, and AlphaCrest Capital Management 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 Winton Capital Management allocated the biggest weight to Healthcare Realty Trust Inc (NYSE:HR), around 0.22% of its 13F portfolio. AlphaCrest Capital Management is also relatively very bullish on the stock, designating 0.13 percent of its 13F equity portfolio to HR.
Because Healthcare Realty Trust Inc (NYSE:HR) has witnessed bearish sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of fund managers that slashed their full holdings heading into Q4. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management sold off the largest stake of the 750 funds watched by Insider Monkey, comprising about $16.6 million in stock. Andrew Sandler’s fund, Sandler Capital Management, also dropped its stock, about $3.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds heading into Q4.
Let’s now review hedge fund activity in other stocks similar to Healthcare Realty Trust Inc (NYSE:HR). We will take a look at East West Bancorp, Inc. (NASDAQ:EWBC), Silicon Laboratories (NASDAQ:SLAB), Deckers Outdoor Corp (NASDAQ:DECK), and Vir Biotechnology, Inc. (NASDAQ:VIR). This group of stocks’ market caps are closest to HR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EWBC | 25 | 180356 | -4 |
| SLAB | 20 | 58924 | -6 |
| DECK | 31 | 554069 | -12 |
| VIR | 4 | 17427 | 2 |
| Average | 20 | 202694 | -5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $203 million. That figure was $38 million in HR’s case. Deckers Outdoor Corp (NASDAQ:DECK) is the most popular stock in this table. On the other hand Vir Biotechnology, Inc. (NASDAQ:VIR) is the least popular one with only 4 bullish hedge fund positions. Healthcare Realty Trust Inc (NYSE:HR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 12.3% in 2020 through June 30th and surpassed the market by 15.5 percentage points. Unfortunately HR wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); HR investors were disappointed as the stock returned 6% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
