We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. 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 December 31st. We at Insider Monkey have made an extensive database of more than 835 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded SITE Centers Corp. (NYSE:SITC) based on those filings.
Is SITE Centers Corp. (NYSE:SITC) the right investment to pursue these days? Hedge funds are buying. The number of long hedge fund bets inched up by 8 recently. Our calculations also showed that SITC isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings). SITC was in 22 hedge funds’ portfolios at the end of December. There were 14 hedge funds in our database with SITC positions at the end of the previous quarter.
In the financial world there are a multitude of metrics stock market investors use to value their stock investments. A couple of the less utilized metrics are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the top money managers can beat the broader indices by a significant margin (see the details here).
Paul Tudor Jones of Tudor Investment Corp
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s analyze the recent hedge fund action surrounding SITE Centers Corp. (NYSE:SITC).
Hedge fund activity in SITE Centers Corp. (NYSE:SITC)
At the end of the fourth quarter, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 57% from the previous quarter. By comparison, 15 hedge funds held shares or bullish call options in SITC a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Ken Griffin’s Citadel Investment Group has the number one position in SITE Centers Corp. (NYSE:SITC), worth close to $39.4 million, accounting for less than 0.1%% of its total 13F portfolio. The second largest stake is held by Balyasny Asset Management, managed by Dmitry Balyasny, which holds a $26.6 million position; 0.2% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions contain Stuart J. Zimmer’s Zimmer Partners, Matthew Crandall Gilman’s Hill Winds Capital and David Harding’s Winton Capital Management. In terms of the portfolio weights assigned to each position Hill Winds Capital allocated the biggest weight to SITE Centers Corp. (NYSE:SITC), around 3.89% of its 13F portfolio. Zimmer Partners is also relatively very bullish on the stock, dishing out 0.22 percent of its 13F equity portfolio to SITC.
As one would reasonably expect, key money managers have jumped into SITE Centers Corp. (NYSE:SITC) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, established the biggest position in SITE Centers Corp. (NYSE:SITC). Balyasny Asset Management had $26.6 million invested in the company at the end of the quarter. Stuart J. Zimmer’s Zimmer Partners also made a $15.8 million investment in the stock during the quarter. The following funds were also among the new SITC investors: Paul Tudor Jones’s Tudor Investment Corp, Donald Sussman’s Paloma Partners, and Mika Toikka’s AlphaCrest Capital Management.
Let’s also examine hedge fund activity in other stocks similar to SITE Centers Corp. (NYSE:SITC). These stocks are Trinity Industries, Inc. (NYSE:TRN), The Hain Celestial Group, Inc. (NASDAQ:HAIN), Cabot Corporation (NYSE:CBT), and Rattler Midstream LP (NASDAQ:RTLR). This group of stocks’ market caps are similar to SITC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TRN | 27 | 860820 | 1 |
| HAIN | 17 | 708372 | -3 |
| CBT | 29 | 139643 | 8 |
| RTLR | 8 | 116513 | -3 |
| Average | 20.25 | 456337 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.25 hedge funds with bullish positions and the average amount invested in these stocks was $456 million. That figure was $112 million in SITC’s case. Cabot Corporation (NYSE:CBT) is the most popular stock in this table. On the other hand Rattler Midstream LP (NASDAQ:RTLR) is the least popular one with only 8 bullish hedge fund positions. SITE Centers Corp. (NYSE:SITC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but 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 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but beat the market by 5.5 percentage points. Unfortunately SITC wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SITC were disappointed as the stock returned -59.3% during the same time period 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 many of these stocks already outperformed the market so far this year.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
