Is STAG Stock A Buy or Sell?

The Insider Monkey team has completed processing the quarterly 13F filings for the December quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Stag Industrial Inc (NYSE:STAG).

Is STAG stock a buy? Investors who are in the know were buying. The number of bullish hedge fund positions increased by 6 lately. Stag Industrial Inc (NYSE:STAG) was in 25 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 24. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that STAG isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 19 hedge funds in our database with STAG holdings at the end of September.

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. Hedge funds have more than $3 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Ken Heebner of Capital Growth Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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 website. Now let’s take a peek at the key hedge fund action regarding Stag Industrial Inc (NYSE:STAG).

Do Hedge Funds Think STAG Is A Good Stock To Buy Now?

Heading into the first quarter of 2021, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 32% from one quarter earlier. By comparison, 18 hedge funds held shares or bullish call options in STAG a year ago. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

The largest stake in Stag Industrial Inc (NYSE:STAG) was held by Waterfront Capital Partners, which reported holding $55 million worth of stock at the end of December. It was followed by Balyasny Asset Management with a $35.5 million position. Other investors bullish on the company included Millennium Management, Carlson Capital, and Capital Growth Management. In terms of the portfolio weights assigned to each position Hill Winds Capital allocated the biggest weight to Stag Industrial Inc (NYSE:STAG), around 6.13% of its 13F portfolio. Waterfront Capital Partners is also relatively very bullish on the stock, earmarking 5.39 percent of its 13F equity portfolio to STAG.

Consequently, specific money managers have jumped into Stag Industrial Inc (NYSE:STAG) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, created the biggest position in Stag Industrial Inc (NYSE:STAG). Balyasny Asset Management had $35.5 million invested in the company at the end of the quarter. Clint Carlson’s Carlson Capital also initiated a $14.5 million position during the quarter. The following funds were also among the new STAG investors: D. E. Shaw’s D E Shaw, David Rodriguez-Fraile’s BlueMar Capital Management, and Matthew L Pinz’s Pinz Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Stag Industrial Inc (NYSE:STAG) but similarly valued. We will take a look at Rapid7 Inc (NASDAQ:RPD), Unum Group (NYSE:UNM), Houlihan Lokey Inc (NYSE:HLI), SLM Corp (NASDAQ:SLM), Exponent, Inc. (NASDAQ:EXPO), Grupo Televisa SAB (NYSE:TV), and Affiliated Managers Group, Inc. (NYSE:AMG). This group of stocks’ market valuations resemble STAG’s market valuation.

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As you can see these stocks had an average of 21.9 hedge funds with bullish positions and the average amount invested in these stocks was $389 million. That figure was $218 million in STAG’s case. Affiliated Managers Group, Inc. (NYSE:AMG) is the most popular stock in this table. On the other hand Exponent, Inc. (NASDAQ:EXPO) is the least popular one with only 15 bullish hedge fund positions. Stag Industrial Inc (NYSE:STAG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for STAG is 81.7. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Hedge funds were also right about betting on STAG as the stock returned 14.8% since the end of Q4 (through 4/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Disclosure: None. This article was originally published at Insider Monkey.