World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Is SL Green Realty Corp (NYSE:SLG) a healthy stock for your portfolio? Hedge funds are getting less optimistic. The number of bullish hedge fund bets were cut by 3 lately. Our calculations also showed that slg isn’t among the 30 most popular stocks among hedge funds. SLG was in 19 hedge funds’ portfolios at the end of March. There were 22 hedge funds in our database with SLG holdings at the end of the previous quarter.
Today there are dozens of signals stock traders use to grade their stock investments. Two of the most underrated signals are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the elite fund managers can beat the broader indices by a significant margin (see the details here).
We’re going to go over the new hedge fund action encompassing SL Green Realty Corp (NYSE:SLG).
How are hedge funds trading SL Green Realty Corp (NYSE:SLG)?
At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SLG over the last 15 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.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons’s Renaissance Technologies has the most valuable position in SL Green Realty Corp (NYSE:SLG), worth close to $67.5 million, accounting for 0.1% of its total 13F portfolio. On Renaissance Technologies’s heels is John Khoury of Long Pond Capital, with a $49.1 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism contain Israel Englander’s Millennium Management, David Harding’s Winton Capital Management and Paul Tudor Jones’s Tudor Investment Corp.
Due to the fact that SL Green Realty Corp (NYSE:SLG) has faced bearish sentiment from the aggregate hedge fund industry, logic holds that there was a specific group of hedge funds that elected to cut their positions entirely last quarter. Interestingly, Jeffrey Pierce’s Snow Park Capital Partners sold off the biggest position of all the hedgies tracked by Insider Monkey, comprising an estimated $7.9 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also dumped its stock, about $3 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 3 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as SL Green Realty Corp (NYSE:SLG) but similarly valued. These stocks are Amdocs Limited (NASDAQ:DOX), Bio-Techne Corporation (NASDAQ:TECH), Bunge Limited (NYSE:BG), and Apartment Investment and Management Co. (NYSE:AIV). This group of stocks’ market caps match SLG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DOX | 26 | 619930 | 2 |
| TECH | 18 | 380876 | 1 |
| BG | 35 | 687417 | -3 |
| AIV | 21 | 628055 | 0 |
| Average | 25 | 579070 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $579 million. That figure was $215 million in SLG’s case. Bunge Limited (NYSE:BG) is the most popular stock in this table. On the other hand Bio-Techne Corporation (NASDAQ:TECH) is the least popular one with only 18 bullish hedge fund positions. SL Green Realty Corp (NYSE:SLG) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately SLG wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SLG investors were disappointed as the stock returned -4.1% during the same time period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
