Hedge Funds Are Souring On Vornado Realty Trust (VNO)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Vornado Realty Trust (NYSE:VNO).

Vornado Realty Trust (NYSE:VNO) shareholders have witnessed a decrease in support from the world’s most elite money managers in recent months. Vornado Realty Trust (NYSE:VNO) was in 25 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 37. There were 29 hedge funds in our database with VNO positions at the end of the second quarter. Our calculations also showed that VNO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

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 we’re going to take a look at the fresh hedge fund action encompassing Vornado Realty Trust (NYSE:VNO).

Dmitry Balyasny of Balyasny Asset Management

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

At Q3’s end, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the previous quarter. By comparison, 20 hedge funds held shares or bullish call options in VNO a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Redwood Capital Management held the most valuable stake in Vornado Realty Trust (NYSE:VNO), which was worth $39.1 million at the end of the third quarter. On the second spot was Balyasny Asset Management which amassed $36.5 million worth of shares. Masterton Capital Management, Pzena Investment Management, and King Street 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 Masterton Capital Management allocated the biggest weight to Vornado Realty Trust (NYSE:VNO), around 12.06% of its 13F portfolio. Hill Winds Capital is also relatively very bullish on the stock, setting aside 3.36 percent of its 13F equity portfolio to VNO.

Due to the fact that Vornado Realty Trust (NYSE:VNO) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of funds who were dropping their full holdings in the third quarter. Interestingly, Renaissance Technologies cut the largest investment of the 750 funds tracked by Insider Monkey, comprising close to $21.5 million in stock. Anna Nikolayevsky’s fund, Axel Capital Management, also dumped its stock, about $8.8 million worth. These moves are interesting, as total hedge fund interest fell by 4 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Vornado Realty Trust (NYSE:VNO) but similarly valued. These stocks are Flex Ltd. (NASDAQ:FLEX), Ovintiv Inc. (NYSE:OVV), The Gap Inc. (NYSE:GPS), CRISPR Therapeutics AG (NASDAQ:CRSP), Jabil Inc. (NYSE:JBL), Vertiv Holdings Co (NYSE:VRT), and Knight-Swift Transportation Holdings Inc. (NYSE:KNX). This group of stocks’ market values resemble VNO’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 33.4 hedge funds with bullish positions and the average amount invested in these stocks was $716 million. That figure was $195 million in VNO’s case. Ovintiv Inc. (NYSE:OVV) is the most popular stock in this table. On the other hand Knight-Swift Transportation Holdings Inc. (NYSE:KNX) is the least popular one with only 21 bullish hedge fund positions. Vornado Realty Trust (NYSE:VNO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for VNO is 30. 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 negative signal and 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 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately VNO wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); VNO investors were disappointed as the stock returned 2.3% since the end of September (through 12/9) 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 most of these stocks already outperformed the market in 2021.

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