The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded W.P. Carey Inc. (NYSE:WPC) based on those filings.
W.P. Carey Inc. (NYSE:WPC) investors should pay attention to an increase in enthusiasm from smart money in recent months. Our calculations also showed that WPC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most investors, hedge funds are seen as underperforming, outdated financial vehicles of years past. While there are over 8000 funds trading today, Our researchers choose to focus on the leaders of this group, about 850 funds. These hedge fund managers oversee the lion’s share of the hedge fund industry’s total asset base, and by keeping track of their finest stock picks, Insider Monkey has unsheathed numerous investment strategies that have historically defeated the market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Donald Sussman of Paloma Partners
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a look at the key hedge fund action surrounding W.P. Carey Inc. (NYSE:WPC).
Hedge fund activity in W.P. Carey Inc. (NYSE:WPC)
At the end of the first quarter, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the previous quarter. The graph below displays the number of hedge funds with bullish position in WPC over the last 18 quarters. 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 W.P. Carey Inc. (NYSE:WPC) was held by Two Sigma Advisors, which reported holding $7.6 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $6.5 million position. Other investors bullish on the company included Millennium Management, Balyasny Asset Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Ayrshire Capital Management allocated the biggest weight to W.P. Carey Inc. (NYSE:WPC), around 0.44% of its 13F portfolio. Dorset Management is also relatively very bullish on the stock, earmarking 0.22 percent of its 13F equity portfolio to WPC.
As aggregate interest increased, key money managers were leading the bulls’ herd. ExodusPoint Capital, managed by Michael Gelband, created the most outsized position in W.P. Carey Inc. (NYSE:WPC). ExodusPoint Capital had $1.1 million invested in the company at the end of the quarter. Donald Sussman’s Paloma Partners also made a $1.1 million investment in the stock during the quarter. The following funds were also among the new WPC investors: Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Renee Yao’s Neo Ivy Capital.
Let’s also examine hedge fund activity in other stocks similar to W.P. Carey Inc. (NYSE:WPC). We will take a look at Ventas, Inc. (NYSE:VTR), Godaddy Inc (NYSE:GDDY), CBOE Global Markets Inc (NASDAQ:CBOE), and Essential Utilities Inc (NYSE:WTRG). All of these stocks’ market caps resemble WPC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VTR | 25 | 337381 | -4 |
| GDDY | 54 | 2247882 | 3 |
| CBOE | 38 | 780569 | 11 |
| WTRG | 23 | 518741 | 2 |
| Average | 35 | 971143 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35 hedge funds with bullish positions and the average amount invested in these stocks was $971 million. That figure was $34 million in WPC’s case. Godaddy Inc (NYSE:GDDY) is the most popular stock in this table. On the other hand Essential Utilities Inc (NYSE:WTRG) is the least popular one with only 23 bullish hedge fund positions. Compared to these stocks W.P. Carey Inc. (NYSE:WPC) is even less popular than WTRG. Hedge funds dodged a bullet by taking a bearish stance towards WPC. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but managed to beat the market by 14.2 percentage points. Unfortunately WPC wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); WPC investors were disappointed as the stock returned 17.8% during the second quarter (through June 10th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
