Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of March. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Vereit Inc (NYSE:VER), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Vereit Inc (NYSE:VER) was in 21 hedge funds’ portfolios at the end of the first quarter of 2019. VER investors should be aware of an increase in hedge fund sentiment of late. There were 18 hedge funds in our database with VER positions at the end of the previous quarter. Our calculations also showed that VER 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.
Let’s take a peek at the latest hedge fund action encompassing Vereit Inc (NYSE:VER).
What have hedge funds been doing with Vereit Inc (NYSE:VER)?
At the end of the first quarter, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards VER over the last 15 quarters. 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 Vereit Inc (NYSE:VER) was held by Eminence Capital, which reported holding $86.4 million worth of stock at the end of March. It was followed by Redwood Capital Management with a $77.9 million position. Other investors bullish on the company included Glendon Capital Management, Renaissance Technologies, and Lakewood Capital Management.
Consequently, some big names were leading the bulls’ herd. Chiron Investment Management, managed by Ryan Caldwell, established the largest position in Vereit Inc (NYSE:VER). Chiron Investment Management had $6.9 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also made a $2.8 million investment in the stock during the quarter. The other funds with brand new VER positions are Minhua Zhang’s Weld Capital Management, Jeffrey Talpins’s Element Capital Management, and Michael Gelband’s ExodusPoint Capital.
Let’s now review hedge fund activity in other stocks similar to Vereit Inc (NYSE:VER). These stocks are Herbalife Nutrition Ltd. (NYSE:HLF), SAGE Therapeutics Inc (NASDAQ:SAGE), Formula One Group (NASDAQ:FWONK), and The Interpublic Group of Companies Inc (NYSE:IPG). This group of stocks’ market caps are similar to VER’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HLF | 32 | 3529120 | 3 |
| SAGE | 28 | 552183 | -1 |
| FWONK | 35 | 1781125 | 0 |
| IPG | 26 | 853779 | -3 |
| Average | 30.25 | 1679052 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.25 hedge funds with bullish positions and the average amount invested in these stocks was $1679 million. That figure was $403 million in VER’s case. Formula One Group (NASDAQ:FWONK) is the most popular stock in this table. On the other hand The Interpublic Group of Companies Inc (NYSE:IPG) is the least popular one with only 26 bullish hedge fund positions. Compared to these stocks Vereit Inc (NYSE:VER) is even less popular than IPG. Hedge funds clearly dropped the ball on VER as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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. A small number of hedge funds were also right about betting on VER as the stock returned 3.2% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
