Is UDR Stock A Buy or Sell?

Is UDR, Inc. (NYSE:UDR) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Is UDR stock a buy? UDR, Inc. (NYSE:UDR) was in 23 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 29. UDR investors should be aware of a decrease in hedge fund interest lately. There were 26 hedge funds in our database with UDR positions at the end of the third quarter. Our calculations also showed that UDR isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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 $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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.

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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. With all of this in mind let’s take a look at the latest hedge fund action surrounding UDR, Inc. (NYSE:UDR).

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

At the end of the fourth quarter, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -12% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards UDR over the last 22 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

The largest stake in UDR, Inc. (NYSE:UDR) was held by Zimmer Partners, which reported holding $126.8 million worth of stock at the end of December. It was followed by Renaissance Technologies with a $85 million position. Other investors bullish on the company included Long Pond Capital, Millennium Management, and Balyasny Asset Management. In terms of the portfolio weights assigned to each position Long Pond Capital allocated the biggest weight to UDR, Inc. (NYSE:UDR), around 2.49% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, dishing out 2.32 percent of its 13F equity portfolio to UDR.

Judging by the fact that UDR, Inc. (NYSE:UDR) has witnessed falling interest from the aggregate hedge fund industry, we can see that there was a specific group of funds that elected to cut their positions entirely heading into Q1. At the top of the heap, Ken Griffin’s Citadel Investment Group said goodbye to the biggest investment of all the hedgies followed by Insider Monkey, valued at an estimated $69.4 million in stock, and Clint Carlson’s Carlson Capital was right behind this move, as the fund dropped about $11.7 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 3 funds heading into Q1.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as UDR, Inc. (NYSE:UDR) but similarly valued. These stocks are Yatsen Holding Limited (NYSE:YSG), Whirlpool Corporation (NYSE:WHR), Kirkland Lake Gold Ltd. (NYSE:KL), Vail Resorts, Inc. (NYSE:MTN), Apollo Global Management Inc (NYSE:APO), Paylocity Holding Corp (NASDAQ:PCTY), and The Carlyle Group Inc (NASDAQ:CG). All of these stocks’ market caps resemble UDR’s market cap.

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As you can see these stocks had an average of 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $837 million. That figure was $483 million in UDR’s case. Whirlpool Corporation (NYSE:WHR) is the most popular stock in this table. On the other hand The Carlyle Group Inc (NASDAQ:CG) is the least popular one with only 21 bullish hedge fund positions. UDR, Inc. (NYSE:UDR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for UDR is 34.9. 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. A small number of hedge funds were also right about betting on UDR as the stock returned 19.5% since the end of the fourth quarter (through 4/19) and outperformed the market by an even larger margin.

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