The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Equity Residential (NYSE:EQR) and determine whether the smart money was really smart about this stock.
Equity Residential (NYSE:EQR) investors should be aware of an increase in support from the world’s most elite money managers in recent months. Equity Residential (NYSE:EQR) was in 32 hedge funds’ portfolios at the end of September. The all time high for this statistic is 33. Our calculations also showed that EQR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind let’s take a glance at the fresh hedge fund action regarding Equity Residential (NYSE:EQR).
Ken Heebner of Capital Growth Management
Do Hedge Funds Think EQR Is A Good Stock To Buy Now?
At Q3’s end, a total of 32 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from one quarter earlier. By comparison, 27 hedge funds held shares or bullish call options in EQR a year ago. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
The largest stake in Equity Residential (NYSE:EQR) was held by Long Pond Capital, which reported holding $158.7 million worth of stock at the end of September. It was followed by Holocene Advisors with a $78 million position. Other investors bullish on the company included Citadel Investment Group, D E Shaw, and Millennium Management. In terms of the portfolio weights assigned to each position Masterton Capital Management allocated the biggest weight to Equity Residential (NYSE:EQR), around 8.55% of its 13F portfolio. Long Pond Capital is also relatively very bullish on the stock, earmarking 5.81 percent of its 13F equity portfolio to EQR.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Capital Growth Management, managed by Ken Heebner, assembled the most valuable position in Equity Residential (NYSE:EQR). Capital Growth Management had $22.7 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also initiated a $14.7 million position during the quarter. The following funds were also among the new EQR investors: Stephen Mykijewycz’s Masterton Capital Management, Renaissance Technologies, and Clint Carlson’s Carlson Capital.
Let’s go over hedge fund activity in other stocks similar to Equity Residential (NYSE:EQR). These stocks are Keysight Technologies Inc (NYSE:KEYS), Sun Life Financial Inc. (NYSE:SLF), D.R. Horton, Inc. (NYSE:DHI), The Kroger Co. (NYSE:KR), Ameriprise Financial, Inc. (NYSE:AMP), Willis Towers Watson Public Limited Company (NASDAQ:WLTW), and Garmin Ltd. (NYSE:GRMN). This group of stocks’ market values are closest to EQR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KEYS | 30 | 675201 | -2 |
| SLF | 8 | 81688 | -3 |
| DHI | 51 | 2184785 | 6 |
| KR | 39 | 3919870 | 0 |
| AMP | 40 | 1309163 | 3 |
| WLTW | 75 | 5055019 | 5 |
| GRMN | 30 | 465208 | 5 |
| Average | 39 | 1955848 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 39 hedge funds with bullish positions and the average amount invested in these stocks was $1956 million. That figure was $559 million in EQR’s case. Willis Towers Watson Public Limited Company (NASDAQ:WLTW) is the most popular stock in this table. On the other hand Sun Life Financial Inc. (NYSE:SLF) is the least popular one with only 8 bullish hedge fund positions. Equity Residential (NYSE:EQR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EQR is 53. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on EQR as the stock returned 10.4% since the end of the third quarter (through 1/31) and outperformed the market by an even larger margin.
Follow Equity Residential (NYSE:EQR)
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Disclosure: None. This article was originally published at Insider Monkey.
