Ventas, Inc. (NYSE:VTR) is trending today after the company announced the pricing of its senior notes offering. According to a press release, Ventas priced a public offering of $400 million aggregate principal amount of 3.125% Senior Notes due 2023 at 99.343% of the principal amount. Ventas, Inc. (NYSE:VTR) expects to close on the sale of the notes on June 2, 2016 and to use the net proceeds to purchase Ventas Realty’s 1.55% Senior Notes due 2016 and for other general corporate purposes. The pricing reflects Ventas’ low cost of capital, and investor’s confidence in the company.
In addition, Ventas, Inc. (NYSE:VTR)’s investors should pay attention to an increase in activity from the world’s largest hedge funds recently. Ventas was in 17 hedge funds’ portfolios at the end of March, compared to 13 hedge funds in our database with VTR positions at the end of the previous quarter. Nevertheless, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Telefonica Brasil SA (ADR) (NYSE:VIV), Discover Financial Services (NYSE:DFS), and Brown-Forman Corporation (NYSE:BF) to gather more data points.
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According to most stock holders, hedge funds are perceived as unimportant, old financial vehicles of the past. While there are greater than 8000 funds in operation today, We choose to focus on the top tier of this club, approximately 700 funds. It is estimated that this group of investors shepherd the lion’s share of the smart money’s total capital, and by paying attention to their highest performing equity investments, Insider Monkey has come up with numerous investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points per year for a decade in their back tests.
With all of this in mind, let’s take a look at the recent action regarding Ventas, Inc. (NYSE:VTR).
According to Insider Monkey’s hedge fund database, billionaire Jim Simons’ Renaissance Technologies has the largest position in Ventas, Inc. (NYSE:VTR), worth close to $159.9 million, comprising 0.3% of its total 13F portfolio. On Renaissance Technologies’s heels is Phill Gross and Robert Atchinson of Adage Capital Management, with a $31.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions comprise Cliff Asness’s AQR Capital Management, and Ken Griffin’s Citadel Investment Group.
On the next page, we are going to assess hedge funds’ new positions in Ventas that were initiated during the first quarter of 2016.
David. E. Shaw’s D E Shaw initiated the most outsized position in Ventas, Inc. (NYSE:VTR). D. E. Shaw had $6.1 million invested in the company at the end of the quarter. Brian Taylor’s Pine River Capital Management also initiated a $1.2 million position during the quarter. The other funds with brand new VTR positions are Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Glenn Russell Dubin’s Highbridge Capital Management, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s check out hedge fund activity in other stocks similar to Ventas, Inc. (NYSE:VTR). These stocks are Telefonica Brasil SA (ADR) (NYSE:VIV), Discover Financial Services (NYSE:DFS), Brown-Forman Corporation (NYSE:BF), and Delphi Automotive PLC (NYSE:DLPH). This group of stocks’ market caps are similar to VTR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VIV | 12 | 119307 | 0 |
| DFS | 38 | 1080850 | -9 |
| BF | 15 | 652319 | -5 |
| DLPH | 29 | 836571 | -13 |
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $672 million. That figure was $488 million in VTR’s case. Discover Financial Services (NYSE:DFS) is the most popular stock in this table. On the other hand Telefonica Brasil SA (ADR) (NYSE:VIV) is the least popular one with only 12 bullish hedge fund positions. Ventas, Inc. (NYSE:VTR) 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. In this regard DFS might be a better candidate to consider a long position.
Disclosure: None
