With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Kite Realty Group Trust (NYSE:KRG).
Is Kite Realty Group Trust (NYSE:KRG) a healthy stock for your portfolio? Hedge funds are taking a bullish view. The number of long hedge fund positions increased by 4 in recent months. Our calculations also showed that KRG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Jim Simons of Renaissance Technologies
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a gander at the recent hedge fund action encompassing Kite Realty Group Trust (NYSE:KRG).
What does smart money think about Kite Realty Group Trust (NYSE:KRG)?
Heading into the fourth quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 67% from the second quarter of 2019. On the other hand, there were a total of 13 hedge funds with a bullish position in KRG a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the biggest position in Kite Realty Group Trust (NYSE:KRG). Renaissance Technologies has a $45.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Intrinsic Edge Capital, led by Mark Coe, holding a $5.3 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Cliff Asness’s AQR Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Intrinsic Edge Capital allocated the biggest weight to Kite Realty Group Trust (NYSE:KRG), around 0.59% of its 13F portfolio. Weld Capital Management is also relatively very bullish on the stock, dishing out 0.04 percent of its 13F equity portfolio to KRG.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Point72 Asset Management, managed by Steve Cohen, created the biggest position in Kite Realty Group Trust (NYSE:KRG). Point72 Asset Management had $0.7 million invested in the company at the end of the quarter. Minhua Zhang’s Weld Capital Management also initiated a $0.2 million position during the quarter. The only other fund with a new position in the stock is Matthew Hulsizer’s PEAK6 Capital Management.
Let’s check out hedge fund activity in other stocks similar to Kite Realty Group Trust (NYSE:KRG). These stocks are Gentherm Inc (NASDAQ:THRM), Viad Corp (NYSE:VVI), CONSOL Energy Inc. (NYSE:CNX), and Bed Bath & Beyond Inc. (NASDAQ:BBBY). All of these stocks’ market caps resemble KRG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| THRM | 15 | 67220 | 0 |
| VVI | 15 | 109600 | -1 |
| CNX | 20 | 527661 | -1 |
| BBBY | 23 | 161773 | 3 |
| Average | 18.25 | 216564 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $217 million. That figure was $60 million in KRG’s case. Bed Bath & Beyond Inc. (NASDAQ:BBBY) is the most popular stock in this table. On the other hand Gentherm Inc (NASDAQ:THRM) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Kite Realty Group Trust (NYSE:KRG) is even less popular than THRM. Hedge funds clearly dropped the ball on KRG as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on KRG as the stock returned 19.8% during the fourth quarter (through the end of November) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
