We at Insider Monkey have gone over 742 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article, we look at what those funds think of Essex Property Trust Inc (NYSE:ESS) based on that data.
Essex Property Trust Inc (NYSE:ESS) shareholders have witnessed a decrease in activity from the world’s largest hedge funds in recent months. ESS was in 19 hedge funds’ portfolios at the end of September. There were 24 hedge funds in our database with ESS holdings at the end of the previous 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 Ameriprise Financial, Inc. (NYSE:AMP), FirstEnergy Corp. (NYSE:FE), and NetEase, Inc (ADR) (NASDAQ:NTES) to gather more data points.
Follow Essex Property Trust Inc. (NYSE:ESS)
Follow Essex Property Trust Inc. (NYSE:ESS)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Now, we’re going to take a gander at the fresh action regarding Essex Property Trust Inc (NYSE:ESS).
How are hedge funds trading Essex Property Trust Inc (NYSE:ESS)?
Heading into the fourth quarter of 2016, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -21% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Long Pond Capital, managed by John Khoury, holds the biggest position in Essex Property Trust Inc (NYSE:ESS). Long Pond Capital has a $213.7 million position in the stock, comprising 10% of its 13F portfolio. On Long Pond Capital’s heels is Israel Englander of Millennium Management, with a $26.1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish include Greg Poole’s Echo Street Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Seeing as Essex Property Trust Inc (NYSE:ESS) has witnessed declining sentiment from the smart money, it’s safe to say that there were a few fund managers that decided to sell off their entire stakes heading into Q4. It’s worth mentioning that Ken Griffin’s Citadel Investment Group dropped the biggest investment of the 700 funds tracked by Insider Monkey, comprising an estimated $2.6 million in stock. Jacob Gottlieb’s fund, Visium Asset Management, also said goodbye to its stock, about $2.5 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 5 funds heading into Q4.
Let’s check out hedge fund activity in other stocks similar to Essex Property Trust Inc (NYSE:ESS). We will take a look at Ameriprise Financial, Inc. (NYSE:AMP), FirstEnergy Corp. (NYSE:FE), NetEase, Inc (ADR) (NASDAQ:NTES), and Workday Inc (NYSE:WDAY). This group of stocks’ market values are similar to ESS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMP | 29 | 284431 | -3 |
| FE | 31 | 1309307 | 4 |
| NTES | 39 | 2975270 | 12 |
| WDAY | 29 | 1406330 | 4 |
As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $1494 million. That figure was $360 million in ESS’s case. NetEase, Inc (ADR) (NASDAQ:NTES) is the most popular stock in this table. On the other hand Ameriprise Financial, Inc. (NYSE:AMP) is the least popular one with only 29 bullish hedge fund positions. Compared to these stocks Essex Property Trust Inc (NYSE:ESS) is even less popular than AMP. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
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Disclosure: None
