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. In this article we are going to take a look at smart money sentiment towards UDR, Inc. (NYSE:UDR).
UDR, Inc. (NYSE:UDR) was in 18 hedge funds’ portfolios at the end of the first quarter of 2019. UDR investors should pay attention to a decrease in hedge fund interest in recent months. There were 20 hedge funds in our database with UDR positions at the end of the previous quarter. Our calculations also showed that udr isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 40 percentage points since May 2014 through May 30, 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 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a look at the fresh hedge fund action regarding UDR, Inc. (NYSE:UDR).
How have hedgies been trading UDR, Inc. (NYSE:UDR)?
At Q1’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the previous quarter. On the other hand, there were a total of 13 hedge funds with a bullish position in UDR a year ago. So, let’s examine 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 UDR, Inc. (NYSE:UDR), with a stake worth $470.8 million reported as of the end of March. Trailing Renaissance Technologies was Zimmer Partners, which amassed a stake valued at $100.4 million. Millennium Management, Citadel Investment Group, and Adage Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Because UDR, Inc. (NYSE:UDR) has experienced falling interest from the entirety of the hedge funds we track, logic holds that there exists a select few hedgies who were dropping their positions entirely heading into Q3. At the top of the heap, Richard Driehaus’s Driehaus Capital dropped the biggest investment of the 700 funds watched by Insider Monkey, comprising about $4.6 million in stock. Ben Levine, Andrew Manuel and Stefan Renold’s fund, LMR Partners, also said goodbye to its stock, about $1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds heading into Q3.
Let’s now take a look at hedge fund activity in other stocks similar to UDR, Inc. (NYSE:UDR). These stocks are Invitation Homes Inc. (NYSE:INVH), Centrais Elétricas Brasileiras S.A. – Eletrobras (NYSE:EBR), Vistra Energy Corp. (NYSE:VST), and HEICO Corporation (NYSE:HEI). This group of stocks’ market valuations are similar to UDR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INVH | 24 | 425523 | 8 |
| EBR | 8 | 22778 | 3 |
| VST | 48 | 3073385 | 4 |
| HEI | 26 | 744050 | -5 |
| Average | 26.5 | 1066434 | 2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.5 hedge funds with bullish positions and the average amount invested in these stocks was $1066 million. That figure was $682 million in UDR’s case. Vistra Energy Corp. (NYSE:VST) is the most popular stock in this table. On the other hand Centrais Elétricas Brasileiras S.A. – Eletrobras (NYSE:EBR) is the least popular one with only 8 bullish hedge fund positions. UDR, Inc. (NYSE:UDR) 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 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately UDR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); UDR investors were disappointed as the stock returned -2% 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.
