At Insider Monkey we follow around 700 of the best-performing investors and even though many of them lost money in the last couple of months (70% of hedge funds lost money in October whereas S&P 500 ETF lost about 7%), the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.
Is Stag Industrial Inc (NYSE:STAG) a buy right now? Money managers are becoming more confident. The number of long hedge fund bets went up by 2 lately. Our calculations also showed that STAG isn’t among the 30 most popular stocks among hedge funds. STAG was in 11 hedge funds’ portfolios at the end of September. There were 9 hedge funds in our database with STAG holdings at the end of the previous quarter.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a peek at the recent hedge fund action surrounding Stag Industrial Inc (NYSE:STAG).
What does the smart money think about Stag Industrial Inc (NYSE:STAG)?
At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards STAG over the last 13 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Millennium Management, managed by Israel Englander, holds the biggest position in Stag Industrial Inc (NYSE:STAG). Millennium Management has a $18.2 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Citadel Investment Group, led by Ken Griffin, holding a $18 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors with similar optimism contain Clint Carlson’s Carlson Capital, J. Alan Reid, Jr.’s Forward Management and Jim Simons’s Renaissance Technologies.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Stevens Capital Management, managed by Matthew Tewksbury, created the largest position in Stag Industrial Inc (NYSE:STAG). Stevens Capital Management had $1.3 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $0.5 million investment in the stock during the quarter. The other funds with brand new STAG positions are Paul Tudor Jones’s Tudor Investment Corp, Ken Griffin’s Citadel Investment Group, and George Zweig, Shane Haas and Ravi Chander’s Signition LP.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Stag Industrial Inc (NYSE:STAG) but similarly valued. We will take a look at The Bank of N.T. Butterfield & Son Limited (NYSE:NTB), Denbury Resources Inc. (NYSE:DNR), Columbia Banking System Inc (NASDAQ:COLB), and Cyberark Software Ltd (NASDAQ:CYBR). This group of stocks’ market valuations match STAG’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NTB | 16 | 242622 | -1 |
| DNR | 21 | 286316 | 3 |
| COLB | 11 | 132802 | 2 |
| CYBR | 24 | 407866 | 7 |
| Average | 18 | 267402 | 2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $267 million. That figure was $70 million in STAG’s case. Cyberark Software Ltd (NASDAQ:CYBR) is the most popular stock in this table. On the other hand Columbia Banking System Inc (NASDAQ:COLB) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Stag Industrial Inc (NYSE:STAG) is even less popular than COLB. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Disclosure: None. This article was originally published at Insider Monkey.
