A market surge in the first quarter, spurred by easing global macroeconomic concerns and Powell’s pivot ended up having a positive impact on the markets and many hedge funds as a result. The stocks of smaller companies which were especially hard hit during the fourth quarter slightly outperformed the market during the first quarter. Unfortunately, Trump is unpredictable and volatility returned in the second quarter and smaller-cap stocks went back to selling off. We finished compiling the latest 13F filings to get an idea about what hedge funds are thinking about the overall market as well as individual stocks. In this article we will study the hedge fund sentiment to see how those concerns affected their ownership of Weingarten Realty Investors (NYSE:WRI) during the quarter.
Is Weingarten Realty Investors (NYSE:WRI) a buy here? Hedge funds are becoming hopeful. The number of long hedge fund bets rose by 1 in recent months. Our calculations also showed that WRI isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? 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 market by 40 percentage points since May 2014 through May 30, 2019 (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 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s review the recent 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 first quarter, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards WRI over the last 15 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
More specifically, Zimmer Partners was the largest shareholder of Weingarten Realty Investors (NYSE:WRI), with a stake worth $13.2 million reported as of the end of March. Trailing Zimmer Partners was Waterfront Capital Partners, which amassed a stake valued at $11.9 million. Carlson Capital, Two Sigma Advisors, and Renaissance Technologies were also very fond of the stock, giving the stock large weights in their portfolios.
Now, key hedge funds have jumped into Weingarten Realty Investors (NYSE:WRI) headfirst. Zimmer Partners, managed by Stuart J. Zimmer, created the most outsized position in Weingarten Realty Investors (NYSE:WRI). Zimmer Partners had $13.2 million invested in the company at the end of the quarter. Clint Carlson’s Carlson Capital also made a $10.9 million investment in the stock during the quarter. The following funds were also among the new WRI investors: Jim Simons’s Renaissance Technologies, Benjamin A. Smith’s Laurion Capital Management, and Jeffrey Talpins’s Element Capital Management.
Let’s also examine hedge fund activity in other stocks similar to Weingarten Realty Investors (NYSE:WRI). We will take a look at BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ), Vermilion Energy Inc (NYSE:VET), PNM Resources, Inc. (NYSE:PNM), and FirstCash, Inc. (NASDAQ:FCFS). 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 |
|---|---|---|---|
| BJ | 22 | 256004 | 6 |
| VET | 6 | 18169 | -1 |
| PNM | 14 | 323111 | -4 |
| FCFS | 12 | 164726 | 0 |
| Average | 13.5 | 190503 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $191 million. That figure was $59 million in WRI’s case. BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) is the most popular stock in this table. On the other hand Vermilion Energy Inc (NYSE:VET) is the least popular one with only 6 bullish hedge fund positions. Weingarten Realty Investors (NYSE:WRI) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately WRI wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); WRI investors were disappointed as the stock returned -0.7% during the same time period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
