We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on December 31st. We at Insider Monkey have made an extensive database of more than 835 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Getty Realty Corp. (NYSE:GTY) based on those filings.
Getty Realty Corp. (NYSE:GTY) was in 9 hedge funds’ portfolios at the end of the fourth quarter of 2019. GTY investors should pay attention to a decrease in hedge fund sentiment recently. There were 10 hedge funds in our database with GTY holdings at the end of the previous quarter. Our calculations also showed that GTY isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
David E. Shaw of D.E. Shaw
We leave no stone unturned when looking for the next great investment idea. For example, COVID-19 pandemic is still the main driver of stock prices. So we are checking out this trader’s corona catalyst trades. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a peek at the fresh hedge fund action encompassing Getty Realty Corp. (NYSE:GTY).
How have hedgies been trading Getty Realty Corp. (NYSE:GTY)?
At the end of the fourth quarter, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GTY over the last 18 quarters. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Getty Realty Corp. (NYSE:GTY), with a stake worth $82.2 million reported as of the end of September. Trailing Renaissance Technologies was Millennium Management, which amassed a stake valued at $3.6 million. Two Sigma Advisors, AQR Capital Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Getty Realty Corp. (NYSE:GTY), around 0.84% of its 13F portfolio. Navellier & Associates is also relatively very bullish on the stock, dishing out 0.19 percent of its 13F equity portfolio to GTY.
Judging by the fact that Getty Realty Corp. (NYSE:GTY) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few hedge funds that elected to cut their entire stakes by the end of the third quarter. It’s worth mentioning that Minhua Zhang’s Weld Capital Management dropped the largest stake of all the hedgies tracked by Insider Monkey, worth about $0.5 million in call options. Matthew Hulsizer’s fund, PEAK6 Capital Management, also dumped its call options, about $0.2 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 1 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Getty Realty Corp. (NYSE:GTY) but similarly valued. We will take a look at Lions Gate Entertainment Corporation (NYSE:LGF-B), Groupon Inc (NASDAQ:GRPN), State Auto Financial (NASDAQ:STFC), and Sandy Spring Bancorp Inc. (NASDAQ:SASR). All of these stocks’ market caps are similar to GTY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LGF-B | 20 | 267632 | 3 |
| GRPN | 26 | 321893 | 4 |
| STFC | 5 | 8229 | -3 |
| SASR | 15 | 73192 | -2 |
| Average | 16.5 | 167737 | 0.5 |
View table here if you experience formatting issues.
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 $168 million. That figure was $96 million in GTY’s case. Groupon Inc (NASDAQ:GRPN) is the most popular stock in this table. On the other hand State Auto Financial (NASDAQ:STFC) is the least popular one with only 5 bullish hedge fund positions. Getty Realty Corp. (NYSE:GTY) 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. 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 1.0% in 2020 through May 1st but beat the market by 12.9 percentage points. Unfortunately GTY wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); GTY investors were disappointed as the stock returned -18.1% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
