Weingarten Realty Investors (WRI): Hedge Funds Are Sticking Around

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Weingarten Realty Investors (NYSE:WRI).

Weingarten Realty Investors (NYSE:WRI) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 20 hedge funds’ portfolios at the end of March. At the end of this article we will also compare WRI to other stocks including Liberty Latin America Ltd. (NASDAQ:LILAK), Brandywine Realty Trust (NYSE:BDN), and Advanced Energy Industries, Inc. (NASDAQ:AEIS) to get a better sense of its popularity.

Video: Watch our video about the top 5 most popular hedge fund stocks.

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’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

Bruce Kovner of Caxton Associates LP

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s check out the fresh hedge fund action regarding Weingarten Realty Investors (NYSE:WRI).

What does smart money think about Weingarten Realty Investors (NYSE:WRI)?

Heading into the second quarter of 2020, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. By comparison, 13 hedge funds held shares or bullish call options in WRI 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.

According to Insider Monkey’s hedge fund database, Echo Street Capital Management, managed by Greg Poole, holds the most valuable position in Weingarten Realty Investors (NYSE:WRI). Echo Street Capital Management has a $17 million position in the stock, comprising 0.4% of its 13F portfolio. Coming in second is Renaissance Technologies,  which holds a $14.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions include Eduardo Abush’s Waterfront Capital Partners, David Harding’s Winton Capital Management and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Waterfront Capital Partners allocated the biggest weight to Weingarten Realty Investors (NYSE:WRI), around 1.22% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, designating 0.6 percent of its 13F equity portfolio to WRI.

Because Weingarten Realty Investors (NYSE:WRI) has experienced a decline in interest from the smart money, it’s safe to say that there exists a select few money managers who were dropping their entire stakes heading into Q4. It’s worth mentioning that Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors said goodbye to the biggest stake of all the hedgies tracked by Insider Monkey, comprising about $0.8 million in stock. Steve Cohen’s fund, Point72 Asset Management, also said goodbye to its stock, about $0.6 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks similar to Weingarten Realty Investors (NYSE:WRI). We will take a look at Liberty Latin America Ltd. (NASDAQ:LILAK), Brandywine Realty Trust (NYSE:BDN), Advanced Energy Industries, Inc. (NASDAQ:AEIS), and Casella Waste Systems Inc. (NASDAQ:CWST). This group of stocks’ market valuations are closest to WRI’s market valuation.

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As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $122 million. That figure was $72 million in WRI’s case. Liberty Latin America Ltd. (NASDAQ:LILAK) is the most popular stock in this table. On the other hand Brandywine Realty Trust (NYSE:BDN) is the least popular one with only 11 bullish hedge fund positions. Weingarten Realty Investors (NYSE:WRI) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th but still beat the market by 14.8 percentage points. Hedge funds were also right about betting on WRI as the stock returned 36.7% in Q2 (through June 17th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Disclosure: None. This article was originally published at Insider Monkey.