Insider Monkey finished processing more than 738 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2019. What do these smart investors think about HFF, Inc. (NYSE:HF)?
Is HFF, Inc. (NYSE:HF) the right investment to pursue these days? The smart money is in a pessimistic mood. The number of bullish hedge fund positions shrunk by 2 lately. Our calculations also showed that hf isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Noam Gottesman, GLG Partners
Let’s take a glance at the key hedge fund action surrounding HFF, Inc. (NYSE:HF).
What does smart money think about HFF, Inc. (NYSE:HF)?
Heading into the second quarter of 2019, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of -15% from one quarter earlier. On the other hand, there were a total of 17 hedge funds with a bullish position in HF a year ago. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
The largest stake in HFF, Inc. (NYSE:HF) was held by Alpine Associates, which reported holding $23.2 million worth of stock at the end of March. It was followed by GLG Partners with a $12 million position. Other investors bullish on the company included Water Island Capital, Renaissance Technologies, and Melqart Asset Management.
Judging by the fact that HFF, Inc. (NYSE:HF) has witnessed falling interest from the smart money, we can see that there is a sect of money managers who sold off their entire stakes last quarter. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the largest investment of the “upper crust” of funds tracked by Insider Monkey, valued at about $1.2 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund dropped about $1.2 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 2 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as HFF, Inc. (NYSE:HF) but similarly valued. We will take a look at Banner Corporation (NASDAQ:BANR), Nevro Corp (NYSE:NVRO), Advanced Energy Industries, Inc. (NASDAQ:AEIS), and Inovalon Holdings Inc (NASDAQ:INOV). This group of stocks’ market values resemble HF’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BANR | 18 | 94129 | 0 |
| NVRO | 32 | 511895 | 12 |
| AEIS | 17 | 149934 | 2 |
| INOV | 9 | 27824 | -4 |
| Average | 19 | 195946 | 2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $196 million. That figure was $71 million in HF’s case. Nevro Corp (NYSE:NVRO) is the most popular stock in this table. On the other hand Inovalon Holdings Inc (NASDAQ:INOV) is the least popular one with only 9 bullish hedge fund positions. HFF, Inc. (NYSE:HF) 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately HF wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); HF investors were disappointed as the stock returned -4.8% during the same time 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.
