Is Store Capital Corporation (NYSE:STOR) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Store Capital Corporation (NYSE:STOR) a buy right now? The best stock pickers are becoming hopeful. The number of bullish hedge fund bets went up by 5 recently. Our calculations also showed that STOR isn’t among the 30 most popular stocks among hedge funds. STOR was in 24 hedge funds’ portfolios at the end of December. There were 19 hedge funds in our database with STOR holdings at the end of the previous quarter.
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 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 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.
We’re going to analyze the new hedge fund action regarding Store Capital Corporation (NYSE:STOR).
Hedge fund activity in Store Capital Corporation (NYSE:STOR)
At Q4’s end, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 26% from the previous quarter. By comparison, 14 hedge funds held shares or bullish call options in STOR a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Store Capital Corporation (NYSE:STOR) was held by Berkshire Hathaway, which reported holding $527.2 million worth of stock at the end of September. It was followed by Millennium Management with a $102.1 million position. Other investors bullish on the company included Renaissance Technologies, AEW Capital Management, and Two Sigma Advisors.
As industrywide interest jumped, some big names were leading the bulls’ herd. Echo Street Capital Management, managed by Greg Poole, established the largest position in Store Capital Corporation (NYSE:STOR). Echo Street Capital Management had $8.3 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $0.8 million position during the quarter. The following funds were also among the new STOR investors: Ken Griffin’s Citadel Investment Group, Michael Gelband’s ExodusPoint Capital, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s also examine hedge fund activity in other stocks similar to Store Capital Corporation (NYSE:STOR). We will take a look at FLIR Systems, Inc. (NASDAQ:FLIR), Arrow Electronics, Inc. (NYSE:ARW), National Instruments Corporation (NASDAQ:NATI), and Foot Locker, Inc. (NYSE:FL). This group of stocks’ market values are similar to STOR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FLIR | 24 | 423863 | -3 |
| ARW | 21 | 354853 | -2 |
| NATI | 29 | 548596 | 5 |
| FL | 35 | 878761 | 9 |
| Average | 27.25 | 551518 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.25 hedge funds with bullish positions and the average amount invested in these stocks was $552 million. That figure was $898 million in STOR’s case. Foot Locker, Inc. (NYSE:FL) is the most popular stock in this table. On the other hand Arrow Electronics, Inc. (NYSE:ARW) is the least popular one with only 21 bullish hedge fund positions. Store Capital Corporation (NYSE:STOR) 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 15 most popular stocks among hedge funds returned 21.3% through April 8th and outperformed the S&P 500 ETF (SPY) by more than 5 percentage points. Hedge funds were also right about betting on STOR, though not to the same extent, as the stock returned 18.3% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
