Here is What Hedge Funds Think About Hudson Pacific Properties Inc (HPP)

Concerns over a shift in Fed’s easy monetary policy have hit several hedge funds hard during the third quarter. A number of sectors are in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25, 2015 and October 30, 2015. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in the major indices. In this article, we will take a closer look at hedge fund sentiment towards Hudson Pacific Properties Inc (NYSE:HPP).

Is Hudson Pacific Properties Inc (NYSE:HPP) the right pick for your portfolio? Investors who are in the know are taking a bearish view. The number of bullish hedge fund bets shrunk by 3 recently. Hudson Pacific Properties Inc (NYSE:HPP) was in 14 hedge funds’ portfolios at the end of the third quarter of 2015. There were 17 hedge funds in our database with Hudson Pacific Properties Inc (NYSE:HPP) positions at the end of the previous quarter. At the end of this article, we will also compare Hudson Pacific Properties Inc (NYSE:HPP) to other stocks, including Wintrust Financial Corp (NASDAQ:WTFC), Infinera Corp. (NASDAQ:INFN), and Clean Harbors Inc (NYSE:CLH) to get a better sense of its popularity.

Today, there are plenty of gauges stock market investors use to value stocks. A pair of the less known gauges are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the top investment managers can outperform their index-focused peers by a significant margin (see the details here).

With all of this in mind, we’re going to take a peek at the recent action surrounding Hudson Pacific Properties Inc (NYSE:HPP).

How are hedge funds trading Hudson Pacific Properties Inc (NYSE:HPP)?

At the end of September, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 18% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Farallon Capital holds the most valuable position in Hudson Pacific Properties Inc (NYSE:HPP). Farallon Capital has a $104.2 million position in the stock, comprising 1.4% of its 13F portfolio. The second most bullish fund manager is Adage Capital Management, managed by Phill Gross and Robert Atchinson, which holds a $42.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other peers with similar optimism comprise Israel Englander’s Millennium Management, Renaissance Technologies, and D E Shaw.

Since Hudson Pacific Properties Inc (NYSE:HPP) has witnessed a declination in interest from the smart money, we can see that there is a sect of hedge funds that elected to cut their positions entirely heading into Q4. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management dumped the biggest position of the “upper crust” of funds watched by Insider Monkey, worth close to $7.2 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also said goodbye to its stock, about $5.1 million worth of shares. These moves are important to note, as aggregate hedge fund interest dropped by 3 funds heading into Q4.

Let’s check out hedge fund activity in other stocks similar to Hudson Pacific Properties Inc (NYSE:HPP). These stocks are Wintrust Financial Corp (NASDAQ:WTFC), Infinera Corp. (NASDAQ:INFN), Clean Harbors Inc (NYSE:CLH), and World Fuel Services Corporation (NYSE:INT). This group of stocks’ market values is closest to Hudson Pacific Properties Inc (NYSE:HPP)’s market value.

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 $208 million. That figure was $247 million in Hudson Pacific Properties Inc (NYSE:HPP)’s case. Infinera Corp. (NASDAQ:INFN) is the most popular stock in this table. On the other hand, Wintrust Financial Corp (NASDAQ:WTFC) is the least popular one with only 11 bullish hedge fund positions. Hudson Pacific Properties Inc (NYSE:HPP) 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. In this regard, Infinera Corp. (NASDAQ:INFN) might be a better candidate to consider a long position.