It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. Since stock returns aren’t usually symmetrically distributed and index returns are more affected by a few outlier stocks (i.e. the FAANG stocks dominating and driving S&P 500 Index’s returns in recent years), more than 50% of the constituents of the Standard and Poor’s 500 Index underperform the benchmark. Hence, if you randomly pick a stock, there is more than 50% chance that you’d fail to beat the market. At the same time, the 20 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey generated an outperformance of more than 8 percentage points so far in 2019. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Weingarten Realty Investors (NYSE:WRI).
Weingarten Realty Investors (NYSE:WRI) shareholders have witnessed a decrease in hedge fund interest in recent months. WRI was in 19 hedge funds’ portfolios at the end of the third quarter of 2019. There were 20 hedge funds in our database with WRI positions at the end of the previous quarter. Our calculations also showed that WRI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most stock holders, hedge funds are assumed to be slow, outdated investment tools of the past. While there are over 8000 funds with their doors open at the moment, Our researchers look at the masters of this club, around 750 funds. These hedge fund managers administer most of the smart money’s total capital, and by paying attention to their unrivaled picks, Insider Monkey has unearthed various investment strategies that have historically outstripped the broader indices. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Clint Carlson of Carlson Capital
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a peek at the key hedge fund action regarding Weingarten Realty Investors (NYSE:WRI).
What have hedge funds been doing with Weingarten Realty Investors (NYSE:WRI)?
At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from the previous quarter. The graph below displays the number of hedge funds with bullish position in WRI over the last 17 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Carlson Capital held the most valuable stake in Weingarten Realty Investors (NYSE:WRI), which was worth $29.3 million at the end of the third quarter. On the second spot was Two Sigma Advisors which amassed $22.1 million worth of shares. Echo Street Capital Management, Waterfront Capital Partners, and Renaissance Technologies 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 Waterfront Capital Partners allocated the biggest weight to Weingarten Realty Investors (NYSE:WRI), around 3.32% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, dishing out 0.67 percent of its 13F equity portfolio to WRI.
Because Weingarten Realty Investors (NYSE:WRI) has experienced falling interest from the smart money, logic holds that there is a sect of hedge funds who sold off their positions entirely last quarter. At the top of the heap, Paul Tudor Jones’s Tudor Investment Corp said goodbye to the largest investment of the 750 funds followed by Insider Monkey, totaling about $3.6 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund dumped about $0.6 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Weingarten Realty Investors (NYSE:WRI) but similarly valued. These stocks are Stag Industrial Inc (NYSE:STAG), Lazard Ltd (NYSE:LAZ), Viper Energy Partners LP (NASDAQ:VNOM), and nVent Electric plc (NYSE:NVT). This group of stocks’ market valuations resemble WRI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| STAG | 20 | 217915 | 9 |
| LAZ | 13 | 600550 | -3 |
| VNOM | 14 | 130553 | 1 |
| NVT | 21 | 564545 | -7 |
| Average | 17 | 378391 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $378 million. That figure was $171 million in WRI’s case. nVent Electric plc (NYSE:NVT) is the most popular stock in this table. On the other hand Lazard Ltd (NYSE:LAZ) is the least popular one with only 13 bullish hedge fund positions. Weingarten Realty Investors (NYSE:WRI) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on WRI, though not to the same extent, as the stock returned 9.3% during the first two months of the fourth quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
