Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Vereit Inc (NYSE:VER), so let’s take a closer look at the sentiment that surrounds VER and compare it against its peers such as ASE Technology Holding Co., Ltd. (NYSE:ASX), Galapagos NV (NASDAQ:GLPG), PerkinElmer, Inc. (NYSE:PKI), and Kirkland Lake Gold Ltd. (NYSE:KL) in the current quarter.
Vereit Inc (NYSE:VER) has seen an increase in support from the world’s most elite money managers recently. Our calculations also showed that VER 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ricky Sandler of Eminence Capital
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a glance at the new hedge fund action encompassing Vereit Inc (NYSE:VER).
What does smart money think about Vereit Inc (NYSE:VER)?
Heading into the fourth quarter of 2019, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 48% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards VER over the last 17 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Eminence Capital was the largest shareholder of Vereit Inc (NYSE:VER), with a stake worth $141.1 million reported as of the end of September. Trailing Eminence Capital was Redwood Capital Management, which amassed a stake valued at $91 million. Glendon Capital Management, Renaissance Technologies, and Long Pond Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Courage Capital allocated the biggest weight to Vereit Inc (NYSE:VER), around 30.95% of its portfolio. Glendon Capital Management is also relatively very bullish on the stock, dishing out 18.05 percent of its 13F equity portfolio to VER.
As one would reasonably expect, specific money managers were breaking ground themselves. Long Pond Capital, managed by John Khoury, assembled the biggest position in Vereit Inc (NYSE:VER). Long Pond Capital had $51.3 million invested in the company at the end of the quarter. Jeffrey Talpins’s Element Capital Management also initiated a $35.3 million position during the quarter. The other funds with new positions in the stock are Stuart J. Zimmer’s Zimmer Partners, Jeffrey Hinkle’s Shoals Capital Management, and Paul Marshall and Ian Wace’s Marshall Wace.
Let’s now take a look at hedge fund activity in other stocks similar to Vereit Inc (NYSE:VER). We will take a look at ASE Technology Holding Co., Ltd. (NYSE:ASX), Galapagos NV (NASDAQ:GLPG), PerkinElmer, Inc. (NYSE:PKI), and Kirkland Lake Gold Ltd. (NYSE:KL). This group of stocks’ market values are closest to VER’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ASX | 8 | 192875 | 0 |
| GLPG | 13 | 142930 | -1 |
| PKI | 24 | 975011 | 0 |
| KL | 16 | 376065 | -5 |
| Average | 15.25 | 421720 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $422 million. That figure was $613 million in VER’s case. PerkinElmer, Inc. (NYSE:PKI) is the most popular stock in this table. On the other hand ASE Technology Holding Co., Ltd. (NYSE:ASX) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Vereit Inc (NYSE:VER) is more popular among hedge funds. 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 VER wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on VER were disappointed as the stock returned -0.2% 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.
