We at Insider Monkey have gone over 752 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Sotherly Hotels Inc (NASDAQ:SOHO) based on that data.
Sotherly Hotels Inc (NASDAQ:SOHO) was in 2 hedge funds’ portfolios at the end of September. SOHO has seen an increase in support from the world’s most elite money managers in recent months. There were 1 hedge funds in our database with SOHO positions at the end of the previous quarter. Our calculations also showed that SOHO isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David Harding of Winton Capital Management
Let’s view the key hedge fund action surrounding Sotherly Hotels Inc (NASDAQ:SOHO).
What have hedge funds been doing with Sotherly Hotels Inc (NASDAQ:SOHO)?
At Q3’s end, a total of 2 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 100% from one quarter earlier. By comparison, 2 hedge funds held shares or bullish call options in SOHO a year ago. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Sotherly Hotels Inc (NASDAQ:SOHO), which was worth $4.4 million at the end of the third quarter. On the second spot was Winton Capital Management which amassed $0.3 million worth of shares.
As industrywide interest jumped, some big names were breaking ground themselves. Winton Capital Management, managed by David Harding, initiated the most outsized position in Sotherly Hotels Inc (NASDAQ:SOHO). Winton Capital Management had $0.3 million invested in the company at the end of the quarter.
Let’s now review hedge fund activity in other stocks similar to Sotherly Hotels Inc (NASDAQ:SOHO). These stocks are Millendo Therapeutics, Inc. (NASDAQ:MLND), NCS Multistage Holdings, Inc. (NASDAQ:NCSM), Great Elm Capital Group, Inc. (NASDAQ:GEC), and Cyren Ltd (NASDAQ:CYRN). This group of stocks’ market caps match SOHO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MLND | 7 | 23132 | 0 |
| NCSM | 4 | 528 | 0 |
| GEC | 8 | 30835 | 1 |
| CYRN | 2 | 1888 | 0 |
| Average | 5.25 | 14096 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.25 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $5 million in SOHO’s case. Great Elm Capital Group, Inc. (NASDAQ:GEC) is the most popular stock in this table. On the other hand Cyren Ltd (NASDAQ:CYRN) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Sotherly Hotels Inc (NASDAQ:SOHO) is even less popular than CYRN. Hedge funds dodged a bullet by taking a bearish stance towards SOHO. Our calculations showed that the top 20 most popular hedge fund stocks returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately SOHO wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); SOHO investors were disappointed as the stock returned -0.6% during the fourth quarter (through 11/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
