With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter of 2021. One of these stocks was W.P. Carey Inc. (NYSE:WPC).
Is W.P. Carey Inc. (NYSE:WPC) a buy here? Hedge funds were selling. The number of long hedge fund positions were trimmed by 5 in recent months. W.P. Carey Inc. (NYSE:WPC) was in 24 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 29. Our calculations also showed that WPC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 29 hedge funds in our database with WPC positions at the end of the second quarter.
Sander Gerber of Hudson Bay Capital
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. Now we’re going to take a gander at the key hedge fund action surrounding W.P. Carey Inc. (NYSE:WPC).
Do Hedge Funds Think WPC Is A Good Stock To Buy Now?
At Q3’s end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the second quarter of 2021. On the other hand, there were a total of 23 hedge funds with a bullish position in WPC a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in W.P. Carey Inc. (NYSE:WPC) was held by Millennium Management, which reported holding $45.5 million worth of stock at the end of September. It was followed by Tudor Investment Corp with a $20.3 million position. Other investors bullish on the company included Citadel Investment Group, Schonfeld Strategic Advisors, and Balyasny Asset Management. In terms of the portfolio weights assigned to each position Gillson Capital allocated the biggest weight to W.P. Carey Inc. (NYSE:WPC), around 0.87% of its 13F portfolio. Te Ahumairangi Investment Management is also relatively very bullish on the stock, dishing out 0.85 percent of its 13F equity portfolio to WPC.
Judging by the fact that W.P. Carey Inc. (NYSE:WPC) has faced falling interest from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of money managers who were dropping their positions entirely heading into Q4. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors sold off the biggest position of the “upper crust” of funds followed by Insider Monkey, worth close to $7.3 million in call options, and Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital) was right behind this move, as the fund cut about $7 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 5 funds heading into Q4.
Let’s go over hedge fund activity in other stocks similar to W.P. Carey Inc. (NYSE:WPC). These stocks are Lightspeed POS Inc. (NYSE:LSPD), Masco Corporation (NYSE:MAS), News Corp (NASDAQ:NWS), Lumen Technologies, Inc. (NYSE:LUMN), Eastman Chemical Company (NYSE:EMN), Elastic N.V. (NYSE:ESTC), and Leidos Holdings Inc (NYSE:LDOS). This group of stocks’ market caps are closest to WPC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LSPD | 26 | 631903 | -3 |
| MAS | 29 | 528895 | -6 |
| NWS | 13 | 130888 | -6 |
| LUMN | 25 | 941373 | -8 |
| EMN | 30 | 254650 | 3 |
| ESTC | 59 | 2985926 | 4 |
| LDOS | 14 | 206379 | -8 |
| Average | 28 | 811431 | -3.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $811 million. That figure was $143 million in WPC’s case. Elastic N.V. (NYSE:ESTC) is the most popular stock in this table. On the other hand News Corp (NASDAQ:NWS) is the least popular one with only 13 bullish hedge fund positions. W.P. Carey Inc. (NYSE:WPC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WPC is 36.8. 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 WPC wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); WPC investors were disappointed as the stock returned 8.1% 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.
Follow W. P. Carey Inc. (NYSE:WPC)
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Disclosure: None. This article was originally published at Insider Monkey.
