Hedge Funds Are Selling WisdomTree Investments, Inc. (WETF)

Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups 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 and analyze what the smart money thinks of WisdomTree Investments, Inc. (NASDAQ:WETF) based on that data.

Even though WisdomTree Investments, Inc. (NASDAQ:WETF)’s stock is 11% in green year-to-date, it lost 26% in the third quarter, which led to investors unloading shares of the company. Among the funds we track, the number of investors bullish on WisdomTree Investments declined by three between July and September. However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as PNM Resources, Inc. (NYSE:PNM), Sothebys (NYSE:BID), and Brandywine Realty Trust (NYSE:BDN) to gather more data points.

In the eyes of most market participants, hedge funds are assumed to be worthless, old investment vehicles of the past. While there are more than 8000 funds with their doors open today, Our researchers hone in on the crème de la crème of this group, approximately 700 funds. Most estimates calculate that this group of people watch over bulk of all hedge funds’ total asset base, and by keeping an eye on their inimitable investments, Insider Monkey has come up with numerous investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

With all of this in mind, we’re going to go over the latest action regarding WisdomTree Investments, Inc. (NASDAQ:WETF).

How have hedgies been trading WisdomTree Investments, Inc. (NASDAQ:WETF)?

At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 18% from the second quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Chuck Royce’s Royce & Associates has the largest position in WisdomTree Investments, Inc. (NASDAQ:WETF), worth close to $31.6 million, accounting for 0.2% of its total 13F portfolio. On Royce & Associates’s heels is Horizon Asset Management, led by Murray Stahl, holding a $9.2 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other peers that hold long positions contain Joel Greenblatt’s Gotham Asset Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Drew Cupps’ Cupps Capital Management.

Since WisdomTree Investments, Inc. (NASDAQ:WETF) has faced falling interest from the aggregate hedge fund industry, it’s easy to see that there were a few funds who sold off their full holdings last quarter. It’s worth mentioning that Renaissance Technologies sold off the biggest stake of the 700 funds watched by Insider Monkey, valued at an estimated $9.6 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund dumped about $3.8 million worth of shares. These moves are important to note, as aggregate hedge fund interest was cut by 3 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as WisdomTree Investments, Inc. (NASDAQ:WETF) but similarly valued. We will take a look at PNM Resources, Inc. (NYSE:PNM), Sothebys (NYSE:BID), Brandywine Realty Trust (NYSE:BDN), and The Geo Group, Inc. (NYSE:GEO). This group of stocks’ market values match WETF’s market value.

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $331 million. That figure was $61 million in WETF’s case. Sothebys (NYSE:BID) is the most popular stock in this table. On the other hand PNM Resources, Inc. (NYSE:PNM) is the least popular one with only 13 bullish hedge fund positions. WisdomTree Investments, Inc. (NASDAQ:WETF) 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. In this regard BID might be a better candidate to consider a long position.