Hedge Funds Are Piling Into Invitation Homes Inc. (INVH)

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 Invitation Homes Inc. (NYSE:INVH) in this article.

Is Invitation Homes Inc. (NYSE:INVH) a buy right now? The smart money was getting more bullish. The number of long hedge fund bets went up by 3 in recent months. Invitation Homes Inc. (NYSE:INVH) was in 36 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 33. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that INVH isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 33 hedge funds in our database with INVH holdings at the end of June.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind let’s go over the new hedge fund action regarding Invitation Homes Inc. (NYSE:INVH).

Sander Gerber of Hudson Bay Capital

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

At the end of the third quarter, a total of 36 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in INVH over the last 25 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).

Among these funds, Echo Street Capital Management held the most valuable stake in Invitation Homes Inc. (NYSE:INVH), which was worth $164.4 million at the end of the third quarter. On the second spot was Long Pond Capital which amassed $102.7 million worth of shares. D E Shaw, Millennium Management, and V3 Capital 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 V3 Capital allocated the biggest weight to Invitation Homes Inc. (NYSE:INVH), around 8.92% of its 13F portfolio. Waterfront Capital Partners is also relatively very bullish on the stock, setting aside 4.67 percent of its 13F equity portfolio to INVH.

Now, specific money managers were leading the bulls’ herd. Renaissance Technologies, established the biggest position in Invitation Homes Inc. (NYSE:INVH). Renaissance Technologies had $23.8 million invested in the company at the end of the quarter. Frank Fu’s CaaS Capital also initiated a $19.2 million position during the quarter. The other funds with brand new INVH positions are Sander Gerber’s Hudson Bay Capital Management, Matthew L Pinz’s Pinz Capital, and Benjamin A. Smith’s Laurion Capital Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Invitation Homes Inc. (NYSE:INVH) but similarly valued. These stocks are Catalent Inc (NYSE:CTLT), Ginkgo Bioworks Holdings Inc. (NYSE:DNA), Royal Caribbean Cruises Ltd. (NYSE:RCL), Magna International Inc. (NYSE:MGA), CNH Industrial NV (NYSE:CNHI), Extra Space Storage, Inc. (NYSE:EXR), and Northern Trust Corporation (NASDAQ:NTRS). This group of stocks’ market caps are closest to INVH’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.4 hedge funds with bullish positions and the average amount invested in these stocks was $1383 million. That figure was $825 million in INVH’s case. Catalent Inc (NYSE:CTLT) is the most popular stock in this table. On the other hand CNH Industrial NV (NYSE:CNHI) is the least popular one with only 25 bullish hedge fund positions. Invitation Homes Inc. (NYSE:INVH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for INVH is 80.3. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately INVH wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on INVH were disappointed as the stock returned 5.9% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

Suggested Articles:

• 15 Best Retail Stocks for 2021
• 11 Best Lithium and Battery Stocks To Buy
• 15 Largest Entertainment Companies

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