Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility. The last 12 months is one of those periods, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 10 percentage points. Given that the funds we track tend to have a disproportionate amount of their portfolios in smaller cap stocks, they have seen some volatility in their portfolios too. Actually their moves are potentially one of the factors that contributed to this volatility. In this article, we use our extensive database of hedge fund holdings to find out what the smart money thinks of VICI Properties Inc. (NYSE:VICI).
Is VICI Properties Inc. (NYSE:VICI) going to take off soon? Hedge funds are becoming more confident. The number of bullish hedge fund bets went up by 22 in recent months. Our calculations also showed that VICI isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most investors, hedge funds are seen as unimportant, old investment tools of yesteryear. While there are more than 8000 funds in operation today, Our experts hone in on the aristocrats of this group, approximately 750 funds. These investment experts handle bulk of all hedge funds’ total asset base, and by following their highest performing equity investments, Insider Monkey has found a number of investment strategies that have historically outpaced the market. Insider Monkey’s flagship hedge fund strategy defeated the S&P 500 index by around 5 percentage points per annum since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike this former hedge fund manager who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a peek at the key hedge fund action encompassing VICI Properties Inc. (NYSE:VICI).
Hedge fund activity in VICI Properties Inc. (NYSE:VICI)
Heading into the third quarter of 2019, a total of 59 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 59% from the previous quarter. By comparison, 44 hedge funds held shares or bullish call options in VICI 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.
Among these funds, Canyon Capital Advisors held the most valuable stake in VICI Properties Inc. (NYSE:VICI), which was worth $554 million at the end of the second quarter. On the second spot was Soros Fund Management which amassed $452.6 million worth of shares. Moreover, Senator Investment Group, Point72 Asset Management, and Citadel Investment Group were also bullish on VICI Properties Inc. (NYSE:VICI), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, specific money managers were breaking ground themselves. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, initiated the biggest position in VICI Properties Inc. (NYSE:VICI). Senator Investment Group had $220.4 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $189 million investment in the stock during the quarter. The other funds with brand new VICI positions are Stuart J. Zimmer’s Zimmer Partners, Anand Parekh’s Alyeska Investment Group, and John Khoury’s Long Pond Capital.
Let’s check out hedge fund activity in other stocks similar to VICI Properties Inc. (NYSE:VICI). These stocks are Qiagen NV (NYSE:QGEN), MGM Growth Properties LLC (NYSE:MGP), Packaging Corporation Of America (NYSE:PKG), and Whirlpool Corporation (NYSE:WHR). This group of stocks’ market caps match VICI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| QGEN | 25 | 303029 | 2 |
| MGP | 14 | 291026 | -3 |
| PKG | 21 | 237295 | -5 |
| WHR | 19 | 570500 | 1 |
| Average | 19.75 | 350463 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $350 million. That figure was $2841 million in VICI’s case. Qiagen NV (NYSE:QGEN) is the most popular stock in this table. On the other hand MGM Growth Properties LLC (NYSE:MGP) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks VICI Properties Inc. (NYSE:VICI) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on VICI, though not to the same extent, as the stock returned 4.1% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
