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 a 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 Healthcare Trust Of America Inc (NYSE:HTA).
Healthcare Trust Of America Inc (NYSE:HTA) shareholders have witnessed an increase in hedge fund sentiment of late. HTA was in 19 hedge funds’ portfolios at the end of the first quarter of 2019. There were 17 hedge funds in our database with HTA positions at the end of the previous quarter. Our calculations also showed that hta isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a look at the key hedge fund action surrounding Healthcare Trust Of America Inc (NYSE:HTA).
How are hedge funds trading Healthcare Trust Of America Inc (NYSE:HTA)?
At Q1’s end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 12% from the previous quarter. On the other hand, there were a total of 12 hedge funds with a bullish position in HTA a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Healthcare Trust Of America Inc (NYSE:HTA) was held by AEW Capital Management, which reported holding $87.1 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $72.2 million position. Other investors bullish on the company included Echo Street Capital Management, Carlson Capital, and Millennium Management.
Now, key money managers have jumped into Healthcare Trust Of America Inc (NYSE:HTA) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most outsized position in Healthcare Trust Of America Inc (NYSE:HTA). Arrowstreet Capital had $12.9 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also made a $6.1 million investment in the stock during the quarter. The following funds were also among the new HTA investors: Mike Vranos’s Ellington, Michael Platt and William Reeves’s BlueCrest Capital Mgmt., and Ken Griffin’s Citadel Investment Group.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Healthcare Trust Of America Inc (NYSE:HTA) but similarly valued. These stocks are Assurant, Inc. (NYSE:AIZ), Nektar Therapeutics (NASDAQ:NKTR), BOK Financial Corporation (NASDAQ:BOKF), and Caesars Entertainment Corp (NASDAQ:CZR). This group of stocks’ market valuations resemble HTA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AIZ | 39 | 617750 | 8 |
| NKTR | 17 | 252184 | -3 |
| BOKF | 16 | 215649 | -3 |
| CZR | 57 | 3150352 | -1 |
| Average | 32.25 | 1058984 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.25 hedge funds with bullish positions and the average amount invested in these stocks was $1059 million. That figure was $459 million in HTA’s case. Caesars Entertainment Corp (NASDAQ:CZR) is the most popular stock in this table. On the other hand BOK Financial Corporation (NASDAQ:BOKF) is the least popular one with only 16 bullish hedge fund positions. Healthcare Trust Of America Inc (NYSE:HTA) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. A small number of hedge funds were also right about betting on HTA, though not to the same extent, as the stock returned 0.9% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
