Hedge funds are not perfect. They have their bad picks just like everyone else. Valeant, a stock hedge funds have loved, lost 79% during the last 12 months ending in November 21. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 mid-cap stocks among the best performing hedge funds yielded an average return of 18% in the same time period, vs. a gain of 7.6% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the successful funds think of W.P. Carey Inc. REIT (NYSE:WPC).
W.P. Carey Inc. REIT (NYSE:WPC) has seen an increase in activity from the world’s largest hedge funds of late. WPC was in 16 hedge funds’ portfolios at the end of the third quarter of 2016. There were 11 hedge funds in our database with WPC holdings at the end of the previous quarter. At the end of this article we will also compare WPC to other stocks including Seagate Technology PLC (NASDAQ:STX), AngloGold Ashanti Limited (ADR) (NYSE:AU), and Helmerich & Payne, Inc. (NYSE:HP) to get a better sense of its popularity.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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How are hedge funds trading W.P. Carey Inc. REIT (NYSE:WPC)?
Heading into the fourth quarter of 2016, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a gain of 45% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in WPC over the last 5 quarters, which shows a 100% burst in smart ownership since the end of 2015. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Markel Gayner Asset Management, led by Tom Gayner, holds the largest position in W.P. Carey Inc. REIT (NYSE:WPC). Markel Gayner Asset Management has a $61.3 million position in the stock, comprising 1.6% of its 13F portfolio. On Markel Gayner Asset Management’s heels is Two Sigma Advisors, led by John Overdeck and David Siegel, holding an $18.9 million position. Remaining members of the smart money that are bullish comprise Israel Englander’s Millennium Management, Leighton Welch’s Welch Capital Partners, and David E. Shaw’s D E Shaw. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Consequently, some big names were breaking ground themselves. Welch Capital Partners created the biggest position in W.P. Carey Inc. REIT (NYSE:WPC). Welch Capital Partners had $9.8 million invested in the company at the end of the quarter. Greg Poole’s Echo Street Capital Management also made a $5.2 million investment in the stock during the quarter. The following funds were also among the new WPC investors: George Hall’s Clinton Group, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Paul Tudor Jones’ Tudor Investment Corp.
Let’s now review hedge fund activity in other stocks similar to W.P. Carey Inc. REIT (NYSE:WPC). We will take a look at Seagate Technology PLC (NASDAQ:STX), AngloGold Ashanti Limited (ADR) (NYSE:AU), Helmerich & Payne, Inc. (NYSE:HP), and Antero Resources Corp (NYSE:AR). This group of stocks’ market caps are closest to WPC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| STX | 33 | 1215628 | 10 |
| AU | 21 | 520074 | -6 |
| HP | 25 | 287195 | 1 |
| AR | 40 | 1577120 | -11 |
As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $900 million. That figure was $134 million in WPC’s case. Antero Resources Corp (NYSE:AR) is the most popular stock in this table. On the other hand AngloGold Ashanti Limited (ADR) (NYSE:AU) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks W.P. Carey Inc. REIT (NYSE:WPC) is even less popular than AU. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. The good news is that the smart money is becoming more bullish on it, which makes this stock one to watch.
Disclosure: None
