The worries about the economic slowdown in China and the ongoing uncertainty about the path of interest-rate increases triggered several waves of equity sell-offs during the third quarter. Of course, most hedge funds and other asset managers had to stomach substantial losses during the bloody three-month period, which might have caused some to consider fleeing the U.S. equity markets. Interestingly, smaller-cap stocks registered higher losses than large-capitalization stocks during the September quarter, suggesting that institutional investors heavily discarded seemingly riskier equities amid high uncertainty and turmoil. In fact, the Russell 2000 Index lost 11.9% in the third quarter, while the Standard and Poor’s 500 benchmark declined a mere 6.4%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Colony Financial Inc (NYSE:CLNY).
Hedge fund interest in Colony Financial Inc (NYSE:CLNY) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare CLNY to other stocks including Rice Energy Inc (NYSE:RICE), Integra Lifesciences Holdings Corp (NASDAQ:IART), and AVX Corporation (NYSE:AVX) to get a better sense of its popularity.
Follow Colony Capital Inc. (NYSE:CLNY)
Follow Colony Capital Inc. (NYSE:CLNY)
According to most shareholders, hedge funds are seen as unimportant, outdated financial tools of yesteryear. While there are more than 8000 funds in operation at present, Our researchers look at the aristocrats of this group, approximately 700 funds. These investment experts have their hands on the majority of the hedge fund industry’s total asset base, and by observing their unrivaled picks, Insider Monkey has figured out a few investment strategies that have historically beaten the broader indices. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points a year for a decade in their back tests.
With all of this in mind, let’s review the fresh action regarding Colony Financial Inc (NYSE:CLNY).
Hedge fund activity in Colony Financial Inc (NYSE:CLNY)
According to Insider Monkey’s hedge fund database, EJF Capital, managed by Emanuel J. Friedman, holds the largest position in Colony Financial Inc (NYSE:CLNY). EJF Capital has an $206 million position in the stock, comprising 10% of its 13F portfolio. Sitting at the No. 2 spot is Brian Jackelow of SAB Capital Management, with an $78.8 million position; 11.4% of its 13F portfolio is allocated to the company. Some other peers that hold long positions comprise Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, Wayne Cooperman’s Cobalt Capital Management and J. Alan Reid, Jr.’s Forward Management.
At the top of the heap, Matthew Mark’s Jet Capital Investors cut the largest position of the 700 funds followed by Insider Monkey, totaling close to $42.2 million in stock. Ken Griffin’s fund, Citadel Investment Group, also said goodbye to its stock, about $20.1 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks similar to Colony Financial Inc (NYSE:CLNY). We will take a look at Rice Energy Inc (NYSE:RICE), Integra Lifesciences Holdings Corp (NASDAQ:IART), AVX Corporation (NYSE:AVX), and Chico’s FAS, Inc. (NYSE:CHS). This group of stocks’ market values match CLNY’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RICE | 23 | 485092 | -3 |
| IART | 19 | 134586 | -3 |
| AVX | 11 | 197975 | -2 |
| CHS | 23 | 398590 | 4 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $304 million. That figure was $594 million in CLNY’s case. Rice Energy Inc (NYSE:RICE) is the most popular stock in this table. On the other hand AVX Corporation (NYSE:AVX) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Colony Financial Inc (NYSE:CLNY) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
