Is VICI Properties Inc. (NYSE:VICI) 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 VICI a good stock to buy now? VICI Properties Inc. (NYSE:VICI) was in 40 hedge funds’ portfolios at the end of September. The all time high for this statistic is 59. VICI has experienced a decrease in activity from the world’s largest hedge funds recently. There were 51 hedge funds in our database with VICI positions at the end of the second quarter. Our calculations also showed that VICI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most traders, hedge funds are viewed as underperforming, old financial tools of yesteryear. While there are greater than 8000 funds in operation today, We choose to focus on the moguls of this group, around 850 funds. It is estimated that this group of investors administer most of the smart money’s total capital, and by following their highest performing investments, Insider Monkey has identified a number of investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Brian Gustavson of 1060 Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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. Keeping this in mind let’s check out the new hedge fund action regarding VICI Properties Inc. (NYSE:VICI).
Do Hedge Funds Think VICI Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 40 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -22% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in VICI over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Canyon Capital Advisors, managed by Joshua Friedman and Mitchell Julis, holds the biggest position in VICI Properties Inc. (NYSE:VICI). Canyon Capital Advisors has a $464.4 million position in the stock, comprising 17.2% of its 13F portfolio. On Canyon Capital Advisors’s heels is George Soros of Soros Fund Management, with a $128.4 million position; 3.1% of its 13F portfolio is allocated to the company. Other peers that hold long positions consist of Ken Griffin’s Citadel Investment Group, Jeffrey Gates’s Gates Capital Management and Matthew Halbower’s Pentwater Capital Management. In terms of the portfolio weights assigned to each position Canyon Capital Advisors allocated the biggest weight to VICI Properties Inc. (NYSE:VICI), around 17.24% of its 13F portfolio. Parsifal Capital Management is also relatively very bullish on the stock, dishing out 9.83 percent of its 13F equity portfolio to VICI.
Since VICI Properties Inc. (NYSE:VICI) has witnessed a decline in interest from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of funds who sold off their positions entirely in the third quarter. Intriguingly, Dan Kamensky’s Marble Ridge Capital said goodbye to the biggest stake of all the hedgies watched by Insider Monkey, totaling about $14.1 million in stock, and Leon Cooperman’s Omega Advisors was right behind this move, as the fund dumped about $10 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 11 funds in the third quarter.
Let’s now review hedge fund activity in other stocks similar to VICI Properties Inc. (NYSE:VICI). We will take a look at Jack Henry & Associates, Inc. (NASDAQ:JKHY), SVB Financial Group (NASDAQ:SIVB), PulteGroup, Inc. (NYSE:PHM), PagSeguro Digital Ltd. (NYSE:PAGS), Fair Isaac Corporation (NYSE:FICO), NortonLifeLock Inc. (NASDAQ:NLOK), and LINE Corporation (NYSE:LN). This group of stocks’ market caps resemble VICI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JKHY | 30 | 351987 | -1 |
| SIVB | 27 | 453139 | 1 |
| PHM | 43 | 1017683 | 1 |
| PAGS | 24 | 1054247 | -3 |
| FICO | 43 | 1273689 | 7 |
| NLOK | 34 | 1047927 | -3 |
| LN | 4 | 6364 | -4 |
| Average | 29.3 | 743577 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.3 hedge funds with bullish positions and the average amount invested in these stocks was $744 million. That figure was $1454 million in VICI’s case. PulteGroup, Inc. (NYSE:PHM) is the most popular stock in this table. On the other hand LINE Corporation (NYSE:LN) is the least popular one with only 4 bullish hedge fund positions. VICI Properties Inc. (NYSE:VICI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VICI is 60.5. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and beat the market again by 15.8 percentage points. Unfortunately VICI wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on VICI were disappointed as the stock returned 8.6% since the end of September (through 12/14) 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 many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
