The government requires hedge funds and wealthy investors that crossed the $100 million equity holdings threshold are required to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on December 31. We at Insider Monkey have made an extensive database of nearly 750 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Duke Realty Corporation (NYSE:DRE) based on those filings.
Is Duke Realty Corporation (NYSE:DRE) a cheap investment today? The smart money is turning bullish. The number of long hedge fund bets moved up by 6 in recent months. Our calculations also showed that DRE isn’t among the 30 most popular stocks among hedge funds. DRE was in 22 hedge funds’ portfolios at the end of December. There were 16 hedge funds in our database with DRE holdings at the end of the previous quarter.
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 take a peek at the recent hedge fund action regarding Duke Realty Corporation (NYSE:DRE).
How have hedgies been trading Duke Realty Corporation (NYSE:DRE)?
Heading into the first quarter of 2019, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 38% from one quarter earlier. On the other hand, there were a total of 14 hedge funds with a bullish position in DRE a year ago. So, let’s see 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, Jeffrey Furber’s AEW Capital Management has the most valuable position in Duke Realty Corporation (NYSE:DRE), worth close to $115.2 million, comprising 3.6% of its total 13F portfolio. On AEW Capital Management’s heels is Israel Englander of Millennium Management, with a $61.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish contain Dmitry Balyasny’s Balyasny Asset Management, Jim Simons’s Renaissance Technologies and David Harding’s Winton Capital Management.
Consequently, specific money managers have been driving this bullishness. Echo Street Capital Management, managed by Greg Poole, initiated the most outsized position in Duke Realty Corporation (NYSE:DRE). Echo Street Capital Management had $6.5 million invested in the company at the end of the quarter. Ray Dalio’s Bridgewater Associates also initiated a $2.2 million position during the quarter. The other funds with new positions in the stock are Joel Greenblatt’s Gotham Asset Management, Jeffrey Talpins’s Element Capital Management, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s now review hedge fund activity in other stocks similar to Duke Realty Corporation (NYSE:DRE). We will take a look at Iron Mountain Incorporated (NYSE:IRM), UGI Corp (NYSE:UGI), Alleghany Corporation (NYSE:Y), and Canopy Growth Corporation (NYSE:CGC). This group of stocks’ market valuations are similar to DRE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IRM | 11 | 48501 | -9 |
| UGI | 24 | 487579 | 5 |
| Y | 19 | 299451 | -2 |
| CGC | 5 | 28537 | -11 |
| Average | 14.75 | 216017 | -4.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $216 million. That figure was $333 million in DRE’s case. UGI Corp (NYSE:UGI) is the most popular stock in this table. On the other hand Canopy Growth Corporation (NYSE:CGC) is the least popular one with only 5 bullish hedge fund positions. Duke Realty Corporation (NYSE:DRE) 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 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Hedge funds were also right about betting on DRE, though not to the same extent, as the stock returned 18.8% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
