The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards SL Green Realty Corp (NYSE:SLG).
Hedge fund interest in SL Green Realty Corp (NYSE:SLG) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that SLG isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). At the end of this article we will also compare SLG to other stocks including Grupo Aeroportuario del Sureste (NYSE:ASR), Pure Storage, Inc. (NYSE:PSTG), and BWX Technologies Inc (NYSE:BWXT) to get a better sense of its popularity.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Peter Rathjens of Arrowstreet Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a gander at the recent hedge fund action surrounding SL Green Realty Corp (NYSE:SLG).
Do Hedge Funds Think SLG Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in SLG over the last 24 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
More specifically, LDR Capital was the largest shareholder of SL Green Realty Corp (NYSE:SLG), with a stake worth $47.3 million reported as of the end of June. Trailing LDR Capital was Arrowstreet Capital, which amassed a stake valued at $41.1 million. Hosking Partners, Citadel Investment Group, and Adage 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 LDR Capital allocated the biggest weight to SL Green Realty Corp (NYSE:SLG), around 29.7% of its 13F portfolio. Hosking Partners is also relatively very bullish on the stock, designating 0.65 percent of its 13F equity portfolio to SLG.
Seeing as SL Green Realty Corp (NYSE:SLG) has witnessed falling interest from the aggregate hedge fund industry, we can see that there was a specific group of hedge funds who sold off their full holdings by the end of the second quarter. It’s worth mentioning that Mark Lee’s Mountaineer Partners Management dumped the biggest investment of the “upper crust” of funds watched by Insider Monkey, totaling an estimated $10.1 million in stock. Emanuel J. Friedman’s fund, EJF Capital, also sold off its stock, about $9.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as SL Green Realty Corp (NYSE:SLG) but similarly valued. We will take a look at Grupo Aeroportuario del Sureste (NYSE:ASR), Pure Storage, Inc. (NYSE:PSTG), BWX Technologies Inc (NYSE:BWXT), NeoGenomics, Inc. (NASDAQ:NEO), Tripadvisor Inc (NASDAQ:TRIP), Saia Inc (NASDAQ:SAIA), and Olo Inc. (NYSE:OLO). This group of stocks’ market valuations are similar to SLG’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ASR | 5 | 43748 | -3 |
| PSTG | 31 | 791397 | 1 |
| BWXT | 20 | 160928 | 4 |
| NEO | 13 | 108232 | -2 |
| TRIP | 36 | 1178260 | -9 |
| SAIA | 22 | 418195 | 6 |
| OLO | 14 | 72548 | -7 |
| Average | 20.1 | 396187 | -1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.1 hedge funds with bullish positions and the average amount invested in these stocks was $396 million. That figure was $144 million in SLG’s case. Tripadvisor Inc (NASDAQ:TRIP) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Sureste (NYSE:ASR) is the least popular one with only 5 bullish hedge fund positions. SL Green Realty Corp (NYSE:SLG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SLG is 52.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately SLG wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SLG were disappointed as the stock returned -8.1% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Sl Green Realty Corp (NYSE:SLG)
Follow Sl Green Realty Corp (NYSE:SLG)
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Disclosure: None. This article was originally published at Insider Monkey.
