Concerns over rising interest rates and expected further rate increases have hit several stocks hard during the fourth quarter of 2018. Trends reversed 180 degrees in 2019 amid Powell’s pivot and optimistic expectations towards a trade deal with China. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were increasing their overall exposure in the third quarter and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards Plymouth Industrial REIT, Inc. (NYSE:PLYM).
Is Plymouth Industrial REIT, Inc. (NYSE:PLYM) the right pick for your portfolio? The best stock pickers are in an optimistic mood. The number of bullish hedge fund positions rose by 5 in recent months. Our calculations also showed that PLYM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most investors, hedge funds are perceived as unimportant, old investment vehicles of yesteryear. While there are over 8000 funds in operation at present, We hone in on the bigwigs of this club, approximately 750 funds. These investment experts orchestrate bulk of the smart money’s total capital, and by watching their first-class stock picks, Insider Monkey has revealed a number of investment strategies that have historically outstripped the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points annually since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Dmitry Balyasny of Balyasny Asset Managemnet
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s take a glance at the key hedge fund action surrounding Plymouth Industrial REIT, Inc. (NYSE:PLYM).
Hedge fund activity in Plymouth Industrial REIT, Inc. (NYSE:PLYM)
Heading into the fourth quarter of 2019, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 250% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in PLYM a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Plymouth Industrial REIT, Inc. (NYSE:PLYM) was held by Renaissance Technologies, which reported holding $7.3 million worth of stock at the end of September. It was followed by Balyasny Asset Management with a $3.6 million position. Other investors bullish on the company included Millennium Management, Marshall Wace, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Balyasny Asset Management allocated the biggest weight to Plymouth Industrial REIT, Inc. (NYSE:PLYM), around 0.02% of its 13F portfolio. Marshall Wace is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to PLYM.
Consequently, some big names have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, assembled the most outsized position in Plymouth Industrial REIT, Inc. (NYSE:PLYM). Balyasny Asset Management had $3.6 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace also initiated a $1.7 million position during the quarter. The following funds were also among the new PLYM investors: John Overdeck and David Siegel’s Two Sigma Advisors, Ken Griffin’s Citadel Investment Group, and Benjamin A. Smith’s Laurion Capital Management.
Let’s go over hedge fund activity in other stocks similar to Plymouth Industrial REIT, Inc. (NYSE:PLYM). These stocks are Bassett Furniture Industries, Incorporated (NASDAQ:BSET), Adaptimmune Therapeutics plc (NASDAQ:ADAP), Craft Brew Alliance Inc (NASDAQ:BREW), and Escalade, Incorporated (NASDAQ:ESCA). This group of stocks’ market caps are similar to PLYM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BSET | 9 | 28847 | 0 |
| ADAP | 10 | 51857 | 0 |
| BREW | 14 | 11952 | 2 |
| ESCA | 3 | 11273 | 0 |
| Average | 9 | 25982 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $16 million in PLYM’s case. Craft Brew Alliance Inc (NASDAQ:BREW) is the most popular stock in this table. On the other hand Escalade, Incorporated (NASDAQ:ESCA) is the least popular one with only 3 bullish hedge fund positions. Plymouth Industrial REIT, Inc. (NYSE:PLYM) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately PLYM wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); PLYM investors were disappointed as the stock returned 1.2% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.