In this article we will take a look at whether hedge funds think Federal Realty Investment Trust (NYSE:FRT) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Federal Realty Investment Trust (NYSE:FRT) was in 24 hedge funds’ portfolios at the end of March. FRT investors should pay attention to an increase in support from the world’s most elite money managers in recent months. There were 22 hedge funds in our database with FRT positions at the end of the previous quarter. Our calculations also showed that FRT isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are dozens of methods stock market investors employ to appraise publicly traded companies. A couple of the less utilized methods are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the best investment managers can trounce their index-focused peers by a healthy margin (see the details here).
Clint Carlson of Carlson Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a peek at the recent hedge fund action encompassing Federal Realty Investment Trust (NYSE:FRT).
What does smart money think about Federal Realty Investment Trust (NYSE:FRT)?
Heading into the second quarter of 2020, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FRT over the last 18 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 Federal Realty Investment Trust (NYSE:FRT), with a stake worth $18.7 million reported as of the end of September. Trailing Renaissance Technologies was Carlson Capital, which amassed a stake valued at $16.7 million. Winton Capital Management, AQR Capital Management, and Adage Capital Management 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 Weld Capital Management allocated the biggest weight to Federal Realty Investment Trust (NYSE:FRT), around 0.69% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, designating 0.52 percent of its 13F equity portfolio to FRT.
Consequently, specific money managers were breaking ground themselves. Carlson Capital, managed by Clint Carlson, established the most outsized position in Federal Realty Investment Trust (NYSE:FRT). Carlson Capital had $16.7 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $2.4 million investment in the stock during the quarter. The other funds with brand new FRT positions are Minhua Zhang’s Weld Capital Management, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Ray Dalio’s Bridgewater Associates.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Federal Realty Investment Trust (NYSE:FRT) but similarly valued. We will take a look at AMERCO (NASDAQ:UHAL), argenx SE (NASDAQ:ARGX), Elbit Systems Ltd. (NASDAQ:ESLT), and Horizon Therapeutics Public Limited Company (NASDAQ:HZNP). This group of stocks’ market values match FRT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UHAL | 15 | 318275 | -2 |
| ARGX | 25 | 588505 | -1 |
| ESLT | 6 | 13855 | 3 |
| HZNP | 41 | 1686085 | 8 |
| Average | 21.75 | 651680 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $652 million. That figure was $78 million in FRT’s case. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) is the most popular stock in this table. On the other hand Elbit Systems Ltd. (NASDAQ:ESLT) is the least popular one with only 6 bullish hedge fund positions. Federal Realty Investment Trust (NYSE:FRT) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on FRT, though not to the same extent, as the stock returned 26.8% during the first two months and ten days of the second quarter and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
