Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Camden Property Trust (NYSE:CPT) to find out whether there were any major changes in hedge funds’ views.
Is CPT stock a buy? The best stock pickers were becoming more confident. The number of long hedge fund bets rose by 1 lately. Camden Property Trust (NYSE:CPT) was in 26 hedge funds’ portfolios at the end of December. The all time high for this statistic is 32. Our calculations also showed that CPT isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Israel Englander of Millennium Management
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Do Hedge Funds Think CPT Is A Good Stock To Buy Now?
At fourth quarter’s end, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from the previous quarter. By comparison, 31 hedge funds held shares or bullish call options in CPT 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, Long Pond Capital was the largest shareholder of Camden Property Trust (NYSE:CPT), with a stake worth $134 million reported as of the end of December. Trailing Long Pond Capital was V3 Capital, which amassed a stake valued at $89.1 million. Angelo Gordon & Co, Millennium Management, and Waterfront Capital Partners 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 V3 Capital allocated the biggest weight to Camden Property Trust (NYSE:CPT), around 17.89% of its 13F portfolio. Angelo Gordon & Co is also relatively very bullish on the stock, earmarking 7.9 percent of its 13F equity portfolio to CPT.
Now, specific money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, assembled the largest position in Camden Property Trust (NYSE:CPT). Citadel Investment Group had $9.2 million invested in the company at the end of the quarter. Jonathan Litt’s Land & Buildings Investment Management also made a $8.1 million investment in the stock during the quarter. The other funds with brand new CPT positions are Paul Tudor Jones’s Tudor Investment Corp, Nicholas Bagnall’s Te Ahumairangi Investment Management, and Minhua Zhang’s Weld Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Camden Property Trust (NYSE:CPT) but similarly valued. We will take a look at Lincoln National Corporation (NYSE:LNC), Trex Company, Inc. (NYSE:TREX), Floor & Decor Holdings, Inc. (NYSE:FND), Teck Resources Ltd (NYSE:TECK), BanColombia S.A. (NYSE:CIB), American Airlines Group Inc (NASDAQ:AAL), and Amedisys Inc (NASDAQ:AMED). This group of stocks’ market caps resemble CPT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LNC | 36 | 708675 | 6 |
| TREX | 30 | 314067 | 4 |
| FND | 31 | 1027190 | -11 |
| TECK | 31 | 798049 | 4 |
| CIB | 4 | 90995 | 1 |
| AAL | 37 | 329142 | 0 |
| AMED | 20 | 305873 | -11 |
| Average | 27 | 510570 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $511 million. That figure was $511 million in CPT’s case. American Airlines Group Inc (NASDAQ:AAL) is the most popular stock in this table. On the other hand BanColombia S.A. (NYSE:CIB) is the least popular one with only 4 bullish hedge fund positions. Camden Property Trust (NYSE:CPT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CPT is 63.7. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. A small number of hedge funds were also right about betting on CPT as the stock returned 18.1% since the end of the fourth quarter (through 4/19) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
