The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 28 holdings, data that is available nowhere else. Should you consider Equity Commonwealth (NYSE:EQC) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Equity Commonwealth (NYSE:EQC) was in 20 hedge funds’ portfolios at the end of June. EQC has experienced a decrease in support from the world’s most elite money managers of late. There were 21 hedge funds in our database with EQC holdings at the end of the previous quarter. Our calculations also showed that EQC isn’t among the 30 most popular stocks among hedge funds (view the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are many signals market participants employ to value stocks. A pair of the less utilized signals are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the elite fund managers can outclass the broader indices by a solid margin (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s go over the fresh hedge fund action regarding Equity Commonwealth (NYSE:EQC).
How have hedgies been trading Equity Commonwealth (NYSE:EQC)?
At the end of the second quarter, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in EQC over the last 16 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.
More specifically, Renaissance Technologies was the largest shareholder of Equity Commonwealth (NYSE:EQC), with a stake worth $54.2 million reported as of the end of March. Trailing Renaissance Technologies was Hudson Way Capital Management, which amassed a stake valued at $31 million. Arrowstreet Capital, D E Shaw, and Cove Street Capital were also very fond of the stock, giving the stock large weights in their portfolios.
Due to the fact that Equity Commonwealth (NYSE:EQC) has witnessed declining sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedge funds that elected to cut their full holdings in the second quarter. At the top of the heap, Michael Gelband’s ExodusPoint Capital said goodbye to the biggest position of all the hedgies followed by Insider Monkey, totaling close to $0.7 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also said goodbye to its stock, about $0.7 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 1 funds in the second quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Equity Commonwealth (NYSE:EQC) but similarly valued. We will take a look at Copa Holdings, S.A. (NYSE:CPA), Penske Automotive Group, Inc. (NYSE:PAG), Plains GP Holdings LP (NYSE:PAGP), and MasTec, Inc. (NYSE:MTZ). This group of stocks’ market caps match EQC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CPA | 16 | 277754 | 2 |
| PAG | 17 | 61220 | -1 |
| PAGP | 17 | 307082 | 1 |
| MTZ | 28 | 452832 | 0 |
| Average | 19.5 | 274722 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.5 hedge funds with bullish positions and the average amount invested in these stocks was $275 million. That figure was $197 million in EQC’s case. MasTec, Inc. (NYSE:MTZ) is the most popular stock in this table. On the other hand Copa Holdings, S.A. (NYSE:CPA) is the least popular one with only 16 bullish hedge fund positions. Equity Commonwealth (NYSE:EQC) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on EQC, though not to the same extent, as the stock returned 5.3% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
