How do we determine whether CubeSmart (NYSE:CUBE) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
CubeSmart (NYSE:CUBE) was in 14 hedge funds’ portfolios at the end of September. CubeSmart (NYSE:CUBE) has seen an increase in activity from the world’s largest hedge funds in recent months. There were 11 hedge funds in our database with CubeSmart (NYSE:CUBE) positions at the end of the previous quarter. The stock market shared a similar opinion, with the shares of CubeSmart gaining 17.49% value throughout the quarter. We will discuss hedge funds that held positions in CubeSmart (NYSE:CUBE), at the end of the last quarter.
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 TransUnion (NYSE:TRU), TIM Participacoes SA (ADR) (NYSE:TSU), and Manhattan Associates, Inc. (NASDAQ:MANH) to gather more data points.
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To most investors, hedge funds are perceived as unimportant, outdated financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open at present, our researchers look at the upper echelon of this group, around 700 funds. Most estimates calculate that this group of people commands the lion’s share of the hedge fund industry’s total capital, and by keeping track of their unrivaled picks, Insider Monkey has unsheathed numerous investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
With all of this in mind, let’s take a peek at the recent action regarding CubeSmart (NYSE:CUBE).
Hedge fund activity in CubeSmart (NYSE:CUBE)
Heading into Q4, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 27% from one quarter earlier. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund and institutional investor database, Jeffrey Furber’s AEW Capital Management has the largest position in CubeSmart (NYSE:CUBE), worth close to $90.5 million, amounting to 2.1% of its total 13F portfolio. Sitting at the No. 2 spot is Ken Heebner of Capital Growth Management, with a $62.3 million position; 2% of its 13F portfolio is allocated to the company. Remaining professional money managers with similar optimism consist of Renaissance Technologies, Israel Englander’s Millennium Management, and Ken Griffin’s Citadel Investment Group.
As aggregate interest increased, specific money managers have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most outsized position in CubeSmart (NYSE:CUBE). Marshall Wace LLP had $5.3 million invested in the company at the end of the quarter. Chuck Royce’s Royce & Associates also initiated a $2 million position during the quarter. The other funds with brand new CUBE positions are Mike Vranos’ Ellington and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as CubeSmart (NYSE:CUBE) but similarly valued. We will take a look at TransUnion (NYSE:TRU), TIM Participacoes SA (ADR) (NYSE:TSU), Manhattan Associates, Inc. (NASDAQ:MANH), and Empire State Realty Trust Inc (NYSE:ESRT). This group of stocks’ market valuations match CubeSmart (NYSE:CUBE)’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TRU | 19 | 222735 | -10 |
| TSU | 13 | 273199 | -12 |
| MANH | 20 | 224751 | 6 |
| ESRT | 9 | 148760 | -6 |
As you can see, these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $217 million. That figure was $261 million in CubeSmart (NYSE:CUBE)’s case. Manhattan Associates, Inc. (NASDAQ:MANH) is the most popular stock in this table. On the other hand, Empire State Realty Trust Inc (NYSE:ESRT) is the least popular one with only 9 bullish hedge fund positions. CubeSmart (NYSE:CUBE) 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, Manhattan Associates, Inc. (NASDAQ:MANH) might be a better candidate to consider a long position.
