While the market driven by short-term sentiment influenced by the accomodative interest rate environment in the US, increasing oil prices and deteriorating expectations towards the resolution of the trade war with China, many smart money investors kept their cautious approach regarding the current bull run in the third quarter and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLRP).
Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLRP) investors should be aware of an increase in hedge fund interest recently. Our calculations also showed that WHLRP isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most shareholders, hedge funds are assumed to be unimportant, old investment vehicles of years past. While there are greater than 8000 funds trading at the moment, Our researchers hone in on the bigwigs of this group, approximately 750 funds. Most estimates calculate that this group of people oversee bulk of the hedge fund industry’s total capital, and by following their finest equity investments, Insider Monkey has spotted a number of investment strategies that have historically outrun 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 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 .
James Dondero of Highland Capital Management
Let’s go over the latest hedge fund action surrounding Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLRP).
What have hedge funds been doing with Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLRP)?
At the end of the third quarter, a total of 2 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 2 from the second quarter of 2019. By comparison, 0 hedge funds held shares or bullish call options in WHLRP a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLRP) was held by Steamboat Capital Partners, which reported holding $6.3 million worth of stock at the end of September. It was followed by Highland Capital Management with a $0.3 million position.
Consequently, key hedge funds have jumped into Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLRP) headfirst. Highland Capital Management, managed by James Dondero, established the biggest position in Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLRP). Highland Capital Management had $0.3 million invested in the company at the end of the quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLRP) but similarly valued. These stocks are Sunworks, Inc. (NASDAQ:SUNW), Qualstar Corporation (NASDAQ:QBAK), JMU Limited (NASDAQ:JMU), and Neurotrope, Inc. (NASDAQ:NTRP). All of these stocks’ market caps resemble WHLRP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SUNW | 1 | 102 | -1 |
| QBAK | 1 | 862 | 0 |
| JMU | 1 | 104 | 0 |
| NTRP | 2 | 62 | 0 |
| Average | 1.25 | 283 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 1.25 hedge funds with bullish positions and the average amount invested in these stocks was $0 million. That figure was $7 million in WHLRP’s case. Neurotrope, Inc. (NASDAQ:NTRP) is the most popular stock in this table. On the other hand Sunworks, Inc. (NASDAQ:SUNW) is the least popular one with only 1 bullish hedge fund positions. Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLRP) is not the most popular stock in this group but hedge fund interest is still above average. 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 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately WHLRP wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on WHLRP were disappointed as the stock returned -4% during the fourth quarter (through 11/22) 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.
Disclosure: None. This article was originally published at Insider Monkey.