Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the fourth quarter of 2018 we observed increased volatility and a 20% drop in stock prices. Things completely reversed in 2019 and stock indices hit record highs. Recent hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards Brookfield Property REIT Inc. (NASDAQ:BPR) to find out whether it was one of their high conviction long-term ideas.
Brookfield Property REIT Inc. (NASDAQ:BPR) investors should be aware of a decrease in enthusiasm from smart money recently. BPR was in 14 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with BPR holdings at the end of the previous quarter. Our calculations also showed that BPR 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.
If you’d ask most market participants, hedge funds are assumed to be worthless, outdated investment vehicles of the past. While there are over 8000 funds with their doors open today, Our experts choose to focus on the upper echelon of this club, about 750 funds. These investment experts manage most of the smart money’s total asset base, and by keeping an eye on their matchless investments, Insider Monkey has deciphered a few investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Israel Englander of Millennium Management
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s check out the key hedge fund action regarding Brookfield Property REIT Inc. (NASDAQ:BPR).
What have hedge funds been doing with Brookfield Property REIT Inc. (NASDAQ:BPR)?
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BPR over the last 17 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Millennium Management, managed by Israel Englander, holds the most valuable position in Brookfield Property REIT Inc. (NASDAQ:BPR). Millennium Management has a $18.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Millennium Management’s heels is Citadel Investment Group, managed by Ken Griffin, which holds a $14.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other professional money managers that are bullish consist of Renaissance Technologies, David E. Shaw’s D E Shaw and Donald Sussman’s Paloma Partners. In terms of the portfolio weights assigned to each position Bulldog Investors allocated the biggest weight to Brookfield Property REIT Inc. (NASDAQ:BPR), around 0.66% of its 13F portfolio. Paloma Partners is also relatively very bullish on the stock, dishing out 0.05 percent of its 13F equity portfolio to BPR.
Judging by the fact that Brookfield Property REIT Inc. (NASDAQ:BPR) has faced falling interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedgies that elected to cut their full holdings in the third quarter. It’s worth mentioning that Emanuel J. Friedman’s EJF Capital cut the largest investment of the 750 funds watched by Insider Monkey, valued at an estimated $1.9 million in stock, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners was right behind this move, as the fund cut about $1.5 million worth. These moves are interesting, as total hedge fund interest fell by 2 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Brookfield Property REIT Inc. (NASDAQ:BPR) but similarly valued. We will take a look at Uniti Group Inc. (NASDAQ:UNIT), Berkshire Hills Bancorp, Inc. (NYSE:BHLB), Kulicke and Soffa Industries Inc. (NASDAQ:KLIC), and Uniqure NV (NASDAQ:QURE). This group of stocks’ market caps resemble BPR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UNIT | 22 | 172932 | 1 |
| BHLB | 10 | 39828 | 1 |
| KLIC | 19 | 255818 | 2 |
| QURE | 38 | 538224 | 4 |
| Average | 22.25 | 251701 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $252 million. That figure was $60 million in BPR’s case. Uniqure NV (NASDAQ:QURE) is the most popular stock in this table. On the other hand Berkshire Hills Bancorp, Inc. (NYSE:BHLB) is the least popular one with only 10 bullish hedge fund positions. Brookfield Property REIT Inc. (NASDAQ:BPR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately BPR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); BPR investors were disappointed as the stock returned -5.1% 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.
