We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like QTS Realty Trust Inc (NYSE:QTS).
Is QTS Realty Trust Inc (NYSE:QTS) a buy, sell, or hold? Money managers are turning bullish. The number of bullish hedge fund bets advanced by 1 recently. Our calculations also showed that QTS 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.
If you’d ask most traders, hedge funds are perceived as unimportant, old financial tools of yesteryear. While there are greater than 8000 funds trading today, We look at the bigwigs of this club, about 750 funds. These money managers control most of all hedge funds’ total asset base, and by keeping an eye on their unrivaled investments, Insider Monkey has formulated many investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Dmitry Balyasny of Balyasny Asset Managemnet
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s take a gander at the latest hedge fund action regarding QTS Realty Trust Inc (NYSE:QTS).
Hedge fund activity in QTS Realty Trust Inc (NYSE:QTS)
At the end of the third quarter, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from one quarter earlier. On the other hand, there were a total of 19 hedge funds with a bullish position in QTS a year ago. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
More specifically, Zimmer Partners was the largest shareholder of QTS Realty Trust Inc (NYSE:QTS), with a stake worth $133.7 million reported as of the end of September. Trailing Zimmer Partners was Citadel Investment Group, which amassed a stake valued at $46.1 million. Land & Buildings Investment Management, Balyasny Asset Management, and Hudson Bay 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 Shoals Capital Management allocated the biggest weight to QTS Realty Trust Inc (NYSE:QTS), around 8.36% of its portfolio. Land & Buildings Investment Management is also relatively very bullish on the stock, designating 8.32 percent of its 13F equity portfolio to QTS.
Now, specific money managers were breaking ground themselves. Perella Weinberg Partners established the largest position in QTS Realty Trust Inc (NYSE:QTS). Perella Weinberg Partners had $0.9 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also made a $0.5 million investment in the stock during the quarter. The only other fund with a brand new QTS position is Renaissance Technologies.
Let’s go over hedge fund activity in other stocks similar to QTS Realty Trust Inc (NYSE:QTS). These stocks are Moog Inc (NYSE:MOG), AllianceBernstein Holding L.P. (NYSE:AB), Brady Corporation (NYSE:BRC), and Ameris Bancorp (NASDAQ:ABCB). This group of stocks’ market values are similar to QTS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MOG | 20 | 102823 | 2 |
| AB | 8 | 18589 | -2 |
| BRC | 18 | 200005 | 5 |
| ABCB | 14 | 143727 | -2 |
| Average | 15 | 116286 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $116 million. That figure was $383 million in QTS’s case. Moog Inc (NYSE:MOG) is the most popular stock in this table. On the other hand AllianceBernstein Holding L.P. (NYSE:AB) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks QTS Realty Trust Inc (NYSE:QTS) is more popular among hedge funds. 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. Unfortunately QTS wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on QTS were disappointed as the stock returned 3.2% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
