It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Getty Realty Corp. (NYSE:GTY).
Getty Realty Corp. (NYSE:GTY) shareholders have witnessed an increase in hedge fund sentiment lately. There were 8 hedge funds in our database with GTY holdings at the end of the second quarter, 1 fewer than there were at the end of the third quarter. At the end of this article we will also compare GTY to other stocks including Avianca Holdings SA (ADR) (NYSE:AVH), Briggs & Stratton Corporation (NYSE:BGG), and American Railcar Industries, Inc. (NASDAQ:ARII) to get a better sense of its popularity.
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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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What have hedge funds been doing with Getty Realty Corp. (NYSE:GTY)?
At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 13% uptick from the previous quarter. On the other hand, there were a total of 3 hedge funds with a bullish position in GTY at the beginning of this year, so hedge fund ownership of the stock has tripled in a mere 3 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.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the biggest position in Getty Realty Corp. (NYSE:GTY). Renaissance Technologies has a $18.7 million position in the stock. The second largest stake is held by Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $7.8 million position. Some other professional money managers that hold long positions include Michael Price’s MFP Investors, Cliff Asness’ AQR Capital Management, and Louis Navellier’s Navellier & Associates. We should note that MFP Investors is among our list of the 100 best performing hedge funds, which is based on the performance of their 13F long positions in non-micro-cap stocks.
As aggregate interest increased, some big names were breaking ground themselves. Citadel Investment Group, led by Ken Griffin, assembled the largest call position in Getty Realty Corp. (NYSE:GTY). Citadel Investment Group had $0.3 million invested in the position at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $0.1 million position during the quarter. The only other fund with a brand new GTY position was Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Getty Realty Corp. (NYSE:GTY) but similarly valued. These stocks are Avianca Holdings SA (ADR) (NYSE:AVH), Briggs & Stratton Corporation (NYSE:BGG), American Railcar Industries, Inc. (NASDAQ:ARII), and Aduro BioTech Inc (NASDAQ:ADRO). This group of stocks’ market caps are closest to GTY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AVH | 5 | 2377 | 5 |
| BGG | 19 | 94719 | 1 |
| ARII | 16 | 522934 | 5 |
| ADRO | 6 | 16305 | -1 |
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $159 million. That figure was $37 million in GTY’s case. Briggs & Stratton Corporation (NYSE:BGG) is the most popular stock in this table. On the other hand Avianca Holdings SA (ADR) (NYSE:AVH) is the least popular one with only 5 bullish hedge fund positions. Getty Realty Corp. (NYSE:GTY) 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 BGG might be a better candidate to consider taking a long position in.
Disclosure: None
