We at Insider Monkey have gone over 738 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of Host Hotels and Resorts Inc (NYSE:HST) based on that data.
Host Hotels and Resorts Inc (NYSE:HST) shareholders have witnessed an increase in hedge fund sentiment lately. HST was in 27 hedge funds’ portfolios at the end of March. There were 22 hedge funds in our database with HST holdings at the end of the previous quarter. Our calculations also showed that HST isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We’re going to view the key hedge fund action regarding Host Hotels and Resorts Inc (NYSE:HST).
What have hedge funds been doing with Host Hotels and Resorts Inc (NYSE:HST)?
At the end of the first quarter, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 23% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards HST over the last 15 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Israel Englander’s Millennium Management has the biggest position in Host Hotels and Resorts Inc (NYSE:HST), worth close to $119.9 million, corresponding to 0.2% of its total 13F portfolio. The second most bullish fund manager is AEW Capital Management, led by Jeffrey Furber, holding a $94.8 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Other professional money managers that are bullish encompass D. E. Shaw’s D E Shaw, Stuart J. Zimmer’s Zimmer Partners and John Overdeck and David Siegel’s Two Sigma Advisors.
With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Zimmer Partners, managed by Stuart J. Zimmer, created the most valuable position in Host Hotels and Resorts Inc (NYSE:HST). Zimmer Partners had $49.2 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $37.5 million investment in the stock during the quarter. The following funds were also among the new HST investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Michael Gelband’s ExodusPoint Capital, and Mike Vranos’s Ellington.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Host Hotels and Resorts Inc (NYSE:HST) but similarly valued. These stocks are Annaly Capital Management, Inc. (NYSE:NLY), Western Digital Corporation (NASDAQ:WDC), Principal Financial Group Inc (NASDAQ:PFG), and Teleflex Incorporated (NYSE:TFX). This group of stocks’ market valuations are similar to HST’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NLY | 21 | 339026 | 5 |
| WDC | 33 | 387729 | 8 |
| PFG | 15 | 62018 | -3 |
| TFX | 19 | 765454 | 4 |
| Average | 22 | 388557 | 3.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $389 million. That figure was $577 million in HST’s case. Western Digital Corporation (NASDAQ:WDC) is the most popular stock in this table. On the other hand Principal Financial Group Inc (NASDAQ:PFG) is the least popular one with only 15 bullish hedge fund positions. Host Hotels and Resorts Inc (NYSE:HST) 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 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately HST wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on HST were disappointed as the stock returned -2.6% during the same 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
