While the market driven by short-term sentiment influenced by the accomodative interest rate environment in the US, virus news and stimulus talks, many smart money investors are starting to get cautious towards the current bull run since March and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 30,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Condor Hospitality Trust, Inc. (NYSE:CDOR).
Hedge fund interest in Condor Hospitality Trust, Inc. (NYSE:CDOR) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that CDOR 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). 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 Motus GI Holdings, Inc. (NASDAQ:MOTS), GigaMedia Limited (NASDAQ:GIGM), and CBL & Associates Properties, Inc. (NYSE:CBL) to gather more data points.
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.
Fred DiSanto of Ancora Advisors
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 10 most profitable companies in the world 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. Keeping this in mind let’s take a look at the recent hedge fund action regarding Condor Hospitality Trust, Inc. (NYSE:CDOR).
What does smart money think about Condor Hospitality Trust, Inc. (NYSE:CDOR)?
At third quarter’s end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CDOR over the last 21 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
The largest stake in Condor Hospitality Trust, Inc. (NYSE:CDOR) was held by Renaissance Technologies, which reported holding $0.9 million worth of stock at the end of September. It was followed by GAMCO Investors with a $0.2 million position. The only other hedge fund that is bullish on the company was Ancora Advisors.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Condor Hospitality Trust, Inc. (NYSE:CDOR) but similarly valued. We will take a look at Motus GI Holdings, Inc. (NASDAQ:MOTS), GigaMedia Limited (NASDAQ:GIGM), CBL & Associates Properties, Inc. (NYSE:CBL), Fujian Blue Hat Interactive Entertainment Technology Ltd. (NASDAQ:BHAT), Millendo Therapeutics, Inc. (NASDAQ:MLND), BBQ Holdings, Inc. (NASDAQ:BBQ), and Volt Information Sciences, Inc. (NYSE:VOLT). This group of stocks’ market caps are closest to CDOR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MOTS | 8 | 7507 | 1 |
| GIGM | 1 | 92 | 0 |
| CBL | 7 | 2193 | -11 |
| BHAT | 3 | 580 | 2 |
| MLND | 9 | 6272 | 1 |
| BBQ | 4 | 12403 | -1 |
| VOLT | 4 | 2261 | 0 |
| Average | 5.1 | 4473 | -1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.1 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $1 million in CDOR’s case. Millendo Therapeutics, Inc. (NASDAQ:MLND) is the most popular stock in this table. On the other hand GigaMedia Limited (NASDAQ:GIGM) is the least popular one with only 1 bullish hedge fund positions. Condor Hospitality Trust, Inc. (NYSE:CDOR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CDOR is 30.4. 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 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on CDOR as the stock returned 24.4% since the end of the third quarter (through 11/23) and outperformed the market by an even larger margin.
Follow Condor Hospitality Trust Inc. (NASDAQ:CDOR)
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Disclosure: None. This article was originally published at Insider Monkey.
