We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Peltz’s recent General Electric losses). However, it is still good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Empire State Realty Trust Inc (NYSE:ESRT).
Empire State Realty Trust Inc (NYSE:ESRT) investors should pay attention to a decrease in support from the world’s most elite money managers recently. ESRT was in 13 hedge funds’ portfolios at the end of September. There were 17 hedge funds in our database with ESRT positions at the end of the previous quarter. Our calculations also showed that esrt isn’t among the 30 most popular stocks among hedge funds.
At the moment there are numerous indicators stock market investors put to use to appraise publicly traded companies. A pair of the most useful indicators are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the top investment managers can trounce the market by a very impressive amount (see the details here).
We’re going to check out the latest hedge fund action encompassing Empire State Realty Trust Inc (NYSE:ESRT).
How have hedgies been trading Empire State Realty Trust Inc (NYSE:ESRT)?
At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -24% from the previous quarter. On the other hand, there were a total of 13 hedge funds with a bullish position in ESRT at the beginning of this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Citadel Investment Group held the most valuable stake in Empire State Realty Trust Inc (NYSE:ESRT), which was worth $55.5 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $51.1 million worth of shares. Moreover, Long Pond Capital, Millennium Management, and Waterfront Capital Partners were also bullish on Empire State Realty Trust Inc (NYSE:ESRT), allocating a large percentage of their portfolios to this stock.
Due to the fact that Empire State Realty Trust Inc (NYSE:ESRT) has faced a decline in interest from the aggregate hedge fund industry, we can see that there was a specific group of hedgies that slashed their positions entirely in the third quarter. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management sold off the largest position of the “upper crust” of funds monitored by Insider Monkey, comprising an estimated $11 million in stock. Michael Platt and William Reeves’s fund, BlueCrest Capital Mgmt., also sold off its stock, about $0.8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 4 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Empire State Realty Trust Inc (NYSE:ESRT). These stocks are MDU Resources Group Inc (NYSE:MDU), Pivotal Software, Inc. (NYSE:PVTL), Stericycle Inc (NASDAQ:SRCL), and Vermilion Energy Inc (NYSE:VET). All of these stocks’ market caps are closest to ESRT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MDU | 19 | 171020 | 4 |
| PVTL | 18 | 314199 | -3 |
| SRCL | 20 | 270362 | -4 |
| VET | 9 | 32842 | 0 |
| Average | 16.5 | 197106 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $197 million. That figure was $224 million in ESRT’s case. Stericycle Inc (NASDAQ:SRCL) is the most popular stock in this table. On the other hand Vermilion Energy Inc (NYSE:VET) is the least popular one with only 9 bullish hedge fund positions. Empire State Realty Trust Inc (NYSE:ESRT) 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 SRCL might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
