In this article we will analyze whether BRT Apartments Corp (NYSE:BRT) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is BRT Apartments (BRT) a good stock to buy now? The best stock pickers were betting on the stock. The number of long hedge fund positions increased by 2 recently. BRT Apartments Corp (NYSE:BRT) was in 7 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 6. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BRT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 5 hedge funds in our database with BRT positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David Harding of Winton Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we’re going to take a gander at the recent hedge fund action encompassing BRT Apartments Corp (NYSE:BRT).
What does smart money think about BRT Apartments Corp (NYSE:BRT)?
At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 40% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BRT over the last 21 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.
Among these funds, Renaissance Technologies held the most valuable stake in BRT Apartments Corp (NYSE:BRT), which was worth $8.4 million at the end of the third quarter. On the second spot was Winton Capital Management which amassed $0.6 million worth of shares. Arrowstreet Capital, MFP Investors, and Bailard Inc were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to BRT Apartments Corp (NYSE:BRT), around 0.24% of its 13F portfolio. MFP Investors is also relatively very bullish on the stock, setting aside 0.09 percent of its 13F equity portfolio to BRT.
Now, key hedge funds have jumped into BRT Apartments Corp (NYSE:BRT) headfirst. Bailard Inc, managed by Thomas Bailard, assembled the largest position in BRT Apartments Corp (NYSE:BRT). Bailard Inc had $0.4 million invested in the company at the end of the quarter. Roger Ibbotson’s Zebra Capital Management also made a $0.2 million investment in the stock during the quarter.
Let’s also examine hedge fund activity in other stocks similar to BRT Apartments Corp (NYSE:BRT). These stocks are Spirit of Texas Bancshares, Inc. (NASDAQ:STXB), Flotek Industries Inc (NYSE:FTK), Territorial Bancorp Inc (NASDAQ:TBNK), Net 1 UEPS Technologies Inc (NASDAQ:UEPS), Summit Financial Group, Inc. (NASDAQ:SMMF), Evofem Biosciences, Inc. (NASDAQ:EVFM), and Callon Petroleum Company (NYSE:CPE). This group of stocks’ market valuations match BRT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| STXB | 8 | 11459 | 2 |
| FTK | 13 | 26942 | -1 |
| TBNK | 4 | 17688 | -1 |
| UEPS | 13 | 30324 | -1 |
| SMMF | 3 | 4503 | -1 |
| EVFM | 11 | 4626 | -4 |
| CPE | 4 | 9386 | -16 |
| Average | 8 | 14990 | -3.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $11 million in BRT’s case. Flotek Industries Inc (NYSE:FTK) is the most popular stock in this table. On the other hand Summit Financial Group, Inc. (NASDAQ:SMMF) is the least popular one with only 3 bullish hedge fund positions. BRT Apartments Corp (NYSE:BRT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BRT is 57. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on BRT as the stock returned 14.9% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
