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 (read our latest 10 coronavirus predictions).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. 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. Insider Monkey finished processing 835 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2019. 0
Regency Centers Corp (NYSE:REG) was in 16 hedge funds’ portfolios at the end of December. REG investors should pay attention to a decrease in activity from the world’s largest hedge funds of late. There were 17 hedge funds in our database with REG holdings at the end of the previous quarter. Our calculations also showed that REG isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video below for Q3 rankings).
In the eyes of most shareholders, hedge funds are viewed as unimportant, outdated financial tools of the past. While there are over 8000 funds in operation at the moment, Our experts look at the elite of this club, approximately 850 funds. These money managers oversee the lion’s share of the smart money’s total capital, and by paying attention to their finest investments, Insider Monkey has spotted several investment strategies that have historically beaten Mr. Market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 35.3% since February 2017 (through March 3rd) even though the market was up more than 35% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Jim Simons of Renaissance Technologies
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. 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 look at the new hedge fund action regarding Regency Centers Corp (NYSE:REG).
What does smart money think about Regency Centers Corp (NYSE:REG)?
At the end of the fourth quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the previous quarter. The graph below displays the number of hedge funds with bullish position in REG over the last 18 quarters. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
The largest stake in Regency Centers Corp (NYSE:REG) was held by Renaissance Technologies, which reported holding $72.4 million worth of stock at the end of September. It was followed by D E Shaw with a $38.6 million position. Other investors bullish on the company included Adage Capital Management, Hill Winds Capital, and AQR Capital Management. In terms of the portfolio weights assigned to each position Hill Winds Capital allocated the biggest weight to Regency Centers Corp (NYSE:REG), around 4.59% of its 13F portfolio. AlphaCrest Capital Management is also relatively very bullish on the stock, dishing out 0.11 percent of its 13F equity portfolio to REG.
Because Regency Centers Corp (NYSE:REG) has faced falling interest from the smart money, logic holds that there exists a select few hedgies that decided to sell off their full holdings last quarter. At the top of the heap, Ken Griffin’s Citadel Investment Group cut the biggest position of all the hedgies watched by Insider Monkey, worth an estimated $5.1 million in stock. David Harding’s fund, Winton Capital Management, also cut its stock, about $2.8 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Regency Centers Corp (NYSE:REG). These stocks are PulteGroup, Inc. (NYSE:PHM), Bausch Health Companies (NYSE:BHC), Weibo Corp (NASDAQ:WB), and Pinterest, Inc. (NYSE:PINS). This group of stocks’ market caps resemble REG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PHM | 34 | 733761 | 3 |
| BHC | 31 | 2822011 | -2 |
| WB | 11 | 355355 | -4 |
| PINS | 37 | 513512 | 4 |
| Average | 28.25 | 1106160 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.25 hedge funds with bullish positions and the average amount invested in these stocks was $1106 million. That figure was $139 million in REG’s case. Pinterest, Inc. (NYSE:PINS) is the most popular stock in this table. On the other hand Weibo Corp (NASDAQ:WB) is the least popular one with only 11 bullish hedge fund positions. Regency Centers Corp (NYSE:REG) 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 22.3% in 2020 through March 16th but beat the market by 3.2 percentage points. Unfortunately REG wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); REG investors were disappointed as the stock returned -28.1% 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 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in Q1.
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.
