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. The Standard and Poor’s 500 Index returned 5.2% over the 12-month period ending October 30, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey (as of September 2014) generated a return of 9.5% over the same time span, with 63% of these stocks outperforming the benchmark. 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 Whitestone REIT (NYSE:WSR).
Whitestone REIT (NYSE:WSR) investors should be aware of an increase in hedge fund sentiment of late. Whitestone REIT (NYSE:WSR) was in 9 hedge funds’ portfolios at the end of the third quarter of 2015. There were 8 hedge funds in our database with Whitestone REIT (NYSE:WSR) holdings at the end of the previous quarter. At the end of this article, we will also compare Whitestone REIT (NYSE:WSR) to other stocks, including NanoString Technologies Inc (NASDAQ:NSTG), Apigee Corp (NASDAQ:APIC), and Barrett Business Services, Inc. (NASDAQ:BBSI) to get a better sense of its popularity.
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In the financial world, there are a large number of gauges market participants put to use to evaluate stocks. Some of the most useful gauges are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the top fund managers can beat their index-focused peers by a very impressive amount (see the details here).
Keeping this in mind, let’s take a look at the new action encompassing Whitestone REIT (NYSE:WSR).
What does the smart money think about Whitestone REIT (NYSE:WSR)?
At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 13% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies has the most valuable position in Whitestone REIT (NYSE:WSR), worth close to $4.6 million, accounting for less than 0.1% of its total 13F portfolio. On Renaissance Technologies’s heels is Israel Englander of Millennium Management, with a $3.9 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that are bullish contain John Overdeck and David Siegel’s Two Sigma Advisors, Ken Griffin’s Citadel Investment Group, and Chao Ku’s Nine Chapters Capital Management.
As industrywide interest jumped, some big names were leading the bulls’ herd. PDT Partners, managed by Peter Muller, established the most outsized position in Whitestone REIT (NYSE:WSR). PDT Partners had $0.1 million invested in the company at the end of the quarter.
Let’s go over hedge fund activity in other stocks similar to Whitestone REIT (NYSE:WSR). We will take a look at NanoString Technologies Inc (NASDAQ:NSTG), Apigee Corp (NASDAQ:APIC), Barrett Business Services, Inc. (NASDAQ:BBSI), and STAAR Surgical Company (NASDAQ:STAA). This group of stocks’ market valuations resembles Whitestone REIT (NYSE:WSR)’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NSTG | 11 | 91320 | 0 |
| APIC | 8 | 42278 | -1 |
| BBSI | 11 | 14155 | 1 |
| STAA | 6 | 93913 | -2 |
As you can see, these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $13 million in Whitestone REIT (NYSE:WSR)’s case. NanoString Technologies Inc (NASDAQ:NSTG) is the most popular stock in this table. On the other hand, STAAR Surgical Company (NASDAQ:STAA) is the least popular one with only 6 bullish hedge fund positions. Whitestone REIT (NYSE:WSR) 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. In this regard, NanoString Technologies Inc (NASDAQ:NSTG) might be a better candidate to consider a long position.
