Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed over the past few years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that hedge funds do have great stock picking skills, so let’s take a glance at the smart money sentiment towards Simon Property Group Inc (NYSE:SPG) .
Simon Property Group Inc (NYSE:SPG) has experienced a decrease in hedge fund sentiment in recent months. SPG was in 20 hedge funds’ portfolios at the end of September. There were 21 hedge funds in our database with SPG positions at the end of the previous quarter. At the end of this article we will also compare SPG to other stocks including Colgate-Palmolive Company (NYSE:CL), Texas Instruments Incorporated (NASDAQ:TXN), and Canon Inc. (ADR) (NYSE:CAJ) to get a better sense of its popularity.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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What have hedge funds been doing with Simon Property Group Inc (NYSE:SPG)?
At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a fall of 5% from one quarter earlier. On the other hand, there were a total of 31 hedge funds with a bullish position in SPG at the beginning of this year. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Jeffrey Furber’s AEW Capital Management has the biggest position in Simon Property Group, Inc (NYSE:SPG), worth close to $536.4 million, comprising 11.2% of its total 13F portfolio. Sitting at the No. 2 spot is Cliff Asness’ AQR Capital Management, which holds a $122.9 million position. Some other professional money managers with similar optimism comprise Phill Gross and Robert Atchinson’s Adage Capital Management, Matthew Tewksbury’s Stevens Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that got rid of their entire stakes in the stock during the third quarter. Interestingly, Glenn Russell Dubin’s Highbridge Capital Management got rid of the biggest position of the “upper crust” of funds monitored by Insider Monkey, worth close to $9 million in call options., and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund said goodbye to about $5.2 million worth of shares.
Let’s also examine hedge fund activity in other stocks similar to Simon Property Group, Inc (NYSE:SPG). We will take a look at Colgate-Palmolive Company (NYSE:CL), Texas Instruments Incorporated (NASDAQ:TXN), Canon Inc. (ADR) (NYSE:CAJ), and Priceline.com Inc (NASDAQ:PCLN). This group of stocks’ market caps match SPG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CL | 38 | 1877260 | 2 |
| TXN | 37 | 943996 | 6 |
| CAJ | 5 | 36687 | -1 |
| PCLN | 98 | 8188039 | 13 |
As you can see these stocks had an average of 44 hedge funds with bullish positions and the average amount invested in these stocks was $2.76 billion. That figure was $893 million in SPG’s case. Priceline.com Inc (NASDAQ:PCLN) is the most popular stock in this table. On the other hand Canon Inc. (ADR) (NYSE:CAJ) is the least popular one with only 5 bullish hedge fund positions. Simon Property Group, Inc (NYSE:SPG) 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 PCLN might be a better candidate to consider taking a long position in.
Disclosure: None
