As we already know from media reports and hedge fund investor letters, many hedge funds lost money in the third quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish theses and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about UDR, Inc. (NYSE:UDR) in this article.
UDR, Inc. (NYSE:UDR) has experienced a decrease in support from the world’s most elite money managers recently. At the end of this article, we will also compare UDR, Inc. (NYSE:UDR) to other stocks, including Expeditors International of Washington (NASDAQ:EXPD), Cheniere Energy Partners LP (NYSEMKT:CQP), and Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) to get a better sense of its popularity.
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To most shareholders, hedge funds are assumed to be slow, outdated investment tools of the past. While there are greater than 8000 funds trading today, our experts look at the top tier of this group, approximately 700 funds. These investment experts orchestrate the majority of the smart money’s total asset base, and by tailing their matchless investments, Insider Monkey has unearthed various investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per year for a decade in their back tests.
Keeping this in mind, let’s review the recent action surrounding UDR, Inc. (NYSE:UDR).
Hedge fund activity in UDR, Inc. (NYSE:UDR)
At the end of September, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 25% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies holds the most valuable position in UDR, Inc. (NYSE:UDR). Renaissance Technologies has a $25.8 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Winton Capital Management, led by David Harding, holding a $7.4 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors with similar optimism include Ken Griffin’s Citadel Investment Group, Cliff Asness’ AQR Capital Management, and Richard Driehaus’ Driehaus Capital.
Due to the fact that UDR, Inc. (NYSE:UDR) has experienced a declining sentiment from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of money managers that elected to cut their positions entirely in the third quarter. At the top of the heap, Israel Englander’s Millennium Management sold off the largest stake of all the hedgies followed by Insider Monkey, totaling about $5.6 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund sold off about $3 million worth of shares. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 3 funds in the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as UDR, Inc. (NYSE:UDR) but similarly valued. We will take a look at Expeditors International of Washington (NASDAQ:EXPD), Cheniere Energy Partners LP (NYSEMKT:CQP), Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), and Digital Realty Trust, Inc. (NYSE:DLR). This group of stocks’ market caps is the closest to UDR, Inc. (NYSE:UDR)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EXPD | 25 | 731428 | -6 |
| CQP | 8 | 30292 | 1 |
| CTRP | 43 | 2075926 | -9 |
| DLR | 22 | 244974 | 8 |
As you can see, these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $771 million. That figure was $45 million in UDR, Inc. (NYSE:UDR)’s case. Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) is the most popular stock in this table. On the other hand, Cheniere Energy Partners LP (NYSEMKT:CQP) is the least popular one with only 8 bullish hedge fund positions. UDR, Inc. (NYSE:UDR) 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, Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) might be a better candidate to consider a long position.
