Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 15 S&P 500 stocks among hedge funds at the end of December 2018 yielded an average return of 19.7% year-to-date, vs. a gain of 13.1% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of HomeStreet Inc (NASDAQ:HMST).
HomeStreet Inc (NASDAQ:HMST) was in 7 hedge funds’ portfolios at the end of the fourth quarter of 2018. HMST investors should pay attention to an increase in hedge fund sentiment recently. There were 6 hedge funds in our database with HMST holdings at the end of the previous quarter. Our calculations also showed that hmst isn’t among the 30 most popular stocks among hedge funds.
In today’s marketplace there are numerous indicators shareholders employ to evaluate their holdings. A duo of the best indicators are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the best investment managers can outclass the S&P 500 by a very impressive margin (see the details here).
Cliff Asness of AQR Capital Management
We’re going to view the recent hedge fund action encompassing HomeStreet Inc (NASDAQ:HMST).
How are hedge funds trading HomeStreet Inc (NASDAQ:HMST)?
Heading into the first quarter of 2019, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the previous quarter. The graph below displays the number of hedge funds with bullish position in HMST over the last 14 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, D E Shaw held the most valuable stake in HomeStreet Inc (NASDAQ:HMST), which was worth $3.8 million at the end of the fourth quarter. On the second spot was AQR Capital Management which amassed $0.7 million worth of shares. Moreover, Fisher Asset Management, Millennium Management, and Citadel Investment Group were also bullish on HomeStreet Inc (NASDAQ:HMST), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, key money managers were leading the bulls’ herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the largest position in HomeStreet Inc (NASDAQ:HMST). Marshall Wace LLP had $0.1 million invested in the company at the end of the quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as HomeStreet Inc (NASDAQ:HMST) but similarly valued. These stocks are Merchants Bancorp (NASDAQ:MBIN), First Foundation Inc (NASDAQ:FFWM), Collegium Pharmaceutical Inc (NASDAQ:COLL), and Solaris Oilfield Infrastructure, Inc. (NYSE:SOI). All of these stocks’ market caps are closest to HMST’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MBIN | 4 | 5638 | -4 |
| FFWM | 11 | 80768 | -2 |
| COLL | 13 | 121954 | -2 |
| SOI | 15 | 77167 | 1 |
| Average | 10.75 | 71382 | -1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was $6 million in HMST’s case. Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) is the most popular stock in this table. On the other hand Merchants Bancorp (NASDAQ:MBIN) is the least popular one with only 4 bullish hedge fund positions. HomeStreet Inc (NASDAQ:HMST) 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 HMST as the stock returned 30% and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
