At Insider Monkey, we pore over the filings of more than 700 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Essex Property Trust Inc (NYSE:ESS) makes for a good investment right now.
Essex Property Trust Inc (NYSE:ESS) was in 22 hedge funds’ portfolios at the end of the third quarter of 2015. Essex Property Trust Inc (NYSE:ESS) has seen a decrease in hedge fund interest lately. There were 24 hedge funds in our database with Essex Property Trust Inc (NYSE:ESS) holdings at the end of the previous quarter. At the end of this article, we will also compare Essex Property Trust Inc (NYSE:ESS) to other stocks, including Palo Alto Networks Inc (NYSE:PANW), Check Point Software Technologies Ltd. (NASDAQ:CHKP), and National-Oilwell Varco, Inc. (NYSE:NOV) to get a better sense of its popularity.
Follow Essex Property Trust Inc. (NYSE:ESS)
Follow Essex Property Trust Inc. (NYSE:ESS)
If you’d ask most shareholders, hedge funds are seen as underperforming, outdated financial tools of years past. While there are over 8000 funds in operation at present, we choose to focus on the elite of this group, about 700 funds. These money managers manage the majority of the smart money’s total capital, and by paying attention to their top investments, Insider Monkey has discovered various investment strategies that have historically beaten the broader indices. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points per year for a decade in their back tests.
With all of this in mind, we’re going to take a look at the latest action encompassing Essex Property Trust Inc (NYSE:ESS).
How are hedge funds trading Essex Property Trust Inc (NYSE:ESS)?
At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 8% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Millennium Management, managed by Israel Englander, holds the most valuable position in Essex Property Trust Inc (NYSE:ESS). Millennium Management has a $80.9 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, with a $79.2 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, Eduardo Abush’s Waterfront Capital Partners and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Seeing as Essex Property Trust Inc (NYSE:ESS) has experienced a declination in interest from the smart money, it’s easy to see that there were a few hedge funds who were dropping their positions entirely heading into Q4. It’s worth mentioning that Ken Heebner’s Capital Growth Management sold off the largest investment of all the hedgies tracked by Insider Monkey, comprising close to $55.3 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund dumped about $8.5 million worth of shares. These bearish behaviors are important to note, as total hedge fund interest was cut by 2 funds heading into Q4.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Essex Property Trust Inc (NYSE:ESS) but similarly valued. We will take a look at Palo Alto Networks Inc (NYSE:PANW), Check Point Software Technologies Ltd. (NASDAQ:CHKP), National-Oilwell Varco, Inc. (NYSE:NOV), and DTE Energy Co (NYSE:DTE). This group of stocks’ market caps resembles Essex Property Trust Inc (NYSE:ESS)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PANW | 47 | 914989 | 2 |
| CHKP | 32 | 1424206 | -10 |
| NOV | 28 | 1346280 | 0 |
| DTE | 16 | 542869 | -3 |
As you can see, these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $1.06 billion. That figure was $289 million in Essex Property Trust Inc (NYSE:ESS)’s case. Palo Alto Networks Inc (NYSE:PANW) is the most popular stock in this table. On the other hand, DTE Energy Co (NYSE:DTE) is the least popular one with only 16 bullish hedge fund positions. Essex Property Trust Inc (NYSE:ESS) 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, Palo Alto Networks Inc (NYSE:PANW) might be a better candidate to consider a long position.
