“October lived up to its scary reputation—the S&P 500 falling in the month by the largest amount in the last 40 years, the only worse Octobers being ’08 and the Crash of ’87. For perspective, there have been only 5 occasions in those 40 years when the S&P 500 declined by greater than 20% from peak to trough. Other than the ’87 Crash, all were during recessions. There were 17 other instances, over the same time frame, when the market fell by over 10% but less than 20%. Furthermore, this is the 18th correction of 5% or more since the current bull market started in March ’09. Corrections are the norm. They can be healthy as they often undo market complacency—overbought levels—potentially allowing the market to base and move even higher.” This is how Trapeze Asset Management summarized the recent market moves in its investor letter. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards one of the stocks hedge funds invest in.
Cousins Properties Incorporated (NYSE:CUZ) investors should be aware of an increase in hedge fund sentiment lately. Our calculations also showed that cuz isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s review the latest hedge fund action surrounding Cousins Properties Incorporated (NYSE:CUZ).
Hedge fund activity in Cousins Properties Incorporated (NYSE:CUZ)
At Q4’s end, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 21% from one quarter earlier. On the other hand, there were a total of 11 hedge funds with a bullish position in CUZ 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.
More specifically, Renaissance Technologies was the largest shareholder of Cousins Properties Incorporated (NYSE:CUZ), with a stake worth $15.5 million reported as of the end of September. Trailing Renaissance Technologies was Millennium Management, which amassed a stake valued at $8.4 million. D E Shaw, Waterfront Capital Partners, and Prospector Partners were also very fond of the stock, giving the stock large weights in their portfolios.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. D E Shaw, managed by D. E. Shaw, initiated the most valuable position in Cousins Properties Incorporated (NYSE:CUZ). D E Shaw had $6.7 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also initiated a $2.4 million position during the quarter. The following funds were also among the new CUZ investors: John Overdeck and David Siegel’s Two Sigma Advisors, Michael Gelband’s ExodusPoint Capital, and David Costen Haley’s HBK Investments.
Let’s go over hedge fund activity in other stocks similar to Cousins Properties Incorporated (NYSE:CUZ). We will take a look at Copa Holdings, S.A. (NYSE:CPA), Turquoise Hill Resources Ltd (NYSE:TRQ), Anaplan, Inc. (NYSE:PLAN), and Marriott Vacations Worldwide Corporation (NYSE:VAC). This group of stocks’ market caps match CUZ’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CPA | 15 | 276932 | -4 |
| TRQ | 16 | 837928 | -2 |
| PLAN | 21 | 442876 | 21 |
| VAC | 26 | 385657 | -6 |
| Average | 19.5 | 485848 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.5 hedge funds with bullish positions and the average amount invested in these stocks was $486 million. That figure was $53 million in CUZ’s case. Marriott Vacations Worldwide Corporation (NYSE:VAC) is the most popular stock in this table. On the other hand Copa Holdings, S.A. (NYSE:CPA) is the least popular one with only 15 bullish hedge fund positions. Cousins Properties Incorporated (NYSE:CUZ) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on CUZ, though not to the same extent, as the stock returned 18.6% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
