Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Howard Hughes Corp (NYSE:HHC), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Howard Hughes Corp (NYSE:HHC) shareholders have witnessed a decrease in activity from the world’s largest hedge funds in recent months. HHC was in 23 hedge funds’ portfolios at the end of the third quarter of 2016. There were 24 hedge funds in our database with HHC positions 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 Endurance Specialty Holdings Ltd. (NYSE:ENH), Randgold Resources Ltd. (ADR) (NASDAQ:GOLD), and HEICO Corporation (NYSE:HEI) to gather more data points.
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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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How have hedgies been trading Howard Hughes Corp (NYSE:HHC)?
At the end of the third quarter, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 4% from one quarter earlier, which represents the fourth straight quarter that hedge fund ownership of HHC has dropped. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Pershing Square, managed by Bill Ackman, holds the most valuable position in Howard Hughes Corp (NYSE:HHC). According to regulatory filings, the fund has a $408.5 million position in the stock, comprising 7.5% of its 13F portfolio. Coming in second is Horizon Asset Management, run by Murray Stahl, which holds a $389 million position; the fund has 10.9% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism include Amy Minella’s Cardinal Capital, Joshua Kaufman and Craig Nerenberg’s Brenner West Capital Partners, and Jane Mendillo’s Harvard Management Co.
Judging by the fact that Howard Hughes Corp (NYSE:HHC) has faced falling interest from the smart money, logic holds that there were a few hedgies who were dropping their full holdings heading into Q4. Intriguingly, Ken Griffin’s Citadel Investment Group sold off the biggest position of the “upper crust” of funds watched by Insider Monkey, totaling about $3.1 million in stock, and Arthur Wrubel’s Wesley Capital Management was right behind this move, as the fund dumped about $2.1 million worth of HHC shares. These transactions are important to note, as total hedge fund interest dropped by 1 fund heading into Q4.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Howard Hughes Corp (NYSE:HHC) but similarly valued. These stocks are Endurance Specialty Holdings Ltd. (NYSE:ENH), Randgold Resources Ltd. (ADR) (NASDAQ:GOLD), HEICO Corporation (NYSE:HEI), and Guidewire Software Inc (NYSE:GWRE). This group of stocks’ market caps are similar to HHC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ENH | 18 | 306751 | 0 |
| GOLD | 18 | 179620 | 0 |
| HEI | 20 | 380440 | -3 |
| GWRE | 22 | 118946 | 5 |
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $246 million. That figure was a whooping $1.03 billion in HHC’s case. Guidewire Software Inc (NYSE:GWRE) is the most popular stock in this table. On the other hand Endurance Specialty Holdings Ltd. (NYSE:ENH) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Howard Hughes Corp (NYSE:HHC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio, bearing in mind that hedge fund ownership continues to fall.
Disclosure: None
