Do Hedge Funds Love Investors Real Estate Trust (CSR)?

After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Investors Real Estate Trust (NYSE:CSR).

Investors Real Estate Trust (NYSE:CSR) was in 5 hedge funds’ portfolios at the end of March. The all time high for this statistic is 7. CSR investors should be aware of a decrease in activity from the world’s largest hedge funds of late. There were 7 hedge funds in our database with CSR holdings at the end of December. Our calculations also showed that CSR isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 115 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.

Dmitry Balyasny of Balyasny Asset Management

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. With all of this in mind we’re going to take a look at the key hedge fund action encompassing Investors Real Estate Trust (NYSE:CSR).

Do Hedge Funds Think CSR Is A Good Stock To Buy Now?

Heading into the second quarter of 2021, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from the fourth quarter of 2020. By comparison, 0 hedge funds held shares or bullish call options in CSR a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Renaissance Technologies was the largest shareholder of Investors Real Estate Trust (NYSE:CSR), with a stake worth $41.4 million reported as of the end of March. Trailing Renaissance Technologies was Balyasny Asset Management, which amassed a stake valued at $1.1 million. Citadel Investment Group, Citadel Investment Group, and Two Sigma Advisors 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 Renaissance Technologies allocated the biggest weight to Investors Real Estate Trust (NYSE:CSR), around 0.05% of its 13F portfolio. Balyasny Asset Management is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to CSR.

Judging by the fact that Investors Real Estate Trust (NYSE:CSR) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there is a sect of hedge funds who were dropping their full holdings in the first quarter. Intriguingly, Michael Gelband’s ExodusPoint Capital sold off the largest position of the 750 funds followed by Insider Monkey, totaling an estimated $0.5 million in stock. David Harding’s fund, Winton Capital Management, also cut its stock, about $0.4 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 2 funds in the first quarter.

Let’s now review hedge fund activity in other stocks similar to Investors Real Estate Trust (NYSE:CSR). These stocks are Epizyme Inc (NASDAQ:EPZM), Connect Biopharma Holdings Limited (NASDAQ:CNTB), Aegion Corp (NASDAQ:AEGN), Resolute Forest Products Inc (NYSE:RFP), World Acceptance Corp. (NASDAQ:WRLD), Quanex Building Products Corporation (NYSE:NX), and NeoGames S.A. (NASDAQ:NGMS). This group of stocks’ market valuations are closest to CSR’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.9 hedge funds with bullish positions and the average amount invested in these stocks was $143 million. That figure was $44 million in CSR’s case. Aegion Corp (NASDAQ:AEGN) is the most popular stock in this table. On the other hand World Acceptance Corp. (NASDAQ:WRLD) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Investors Real Estate Trust (NYSE:CSR) is even less popular than WRLD. Our overall hedge fund sentiment score for CSR is 24.4. 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 clearly dropped the ball on CSR as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. A small number of hedge funds were also right about betting on CSR as the stock returned 12.3% since Q1 (through June 18th) and outperformed the market by an even larger margin.

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