The government requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings discloses the funds’ positions on September 30. We at Insider Monkey have made an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Starwood Property Trust, Inc. (NYSE:STWD) based on those filings.
Starwood Property Trust, Inc. (NYSE:STWD) investors should be aware of an increase in activity from the world’s largest hedge funds recently. STWD was in 26 hedge funds’ portfolios at the end of September. There were 25 hedge funds in our database with STWD positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Southwestern Energy Company (NYSE:SWN), Pinnacle Foods Inc (NYSE:PF), and Chesapeake Energy Corporation (NYSE:CHK) to gather more data points.
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Today there are a multitude of methods stock traders can use to size up their holdings. Some of the best methods are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the elite fund managers can outpace their index-focused peers by a significant margin (see the details here).
Keeping this in mind, let’s take a look at the new action encompassing Starwood Property Trust, Inc. (NYSE:STWD).
How have hedgies been trading Starwood Property Trust, Inc. (NYSE:STWD)?
Heading into Q4, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Emanuel J. Friedman’s EJF Capital has the largest position in Starwood Property Trust, Inc. (NYSE:STWD), worth close to $164.8 million, corresponding to 8% of its total 13F portfolio. On EJF Capital’s heels is Glenhill Advisors, led by Glenn J. Krevlin, holding a $113.5 million position; the fund has 8.9% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Kenneth Tropin’s Graham Capital Management, Charles Clough’s Clough Capital Partners and Arthur Wrubel’s Wesley Capital Management.
As aggregate interest increased, key money managers have been driving this bullishness. PDT Partners, managed by Peter Muller, assembled the most outsized position in Starwood Property Trust, Inc. (NYSE:STWD). PDT Partners had $1.3 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also initiated a $0.8 million position during the quarter. The other funds with brand new STWD positions are D E Shaw, Mike Vranos’s Ellington, and David Costen Haley’s HBK Investments.
Let’s now take a look at hedge fund activity in other stocks similar to Starwood Property Trust, Inc. (NYSE:STWD). We will take a look at Southwestern Energy Company (NYSE:SWN), Pinnacle Foods Inc (NYSE:PF), Chesapeake Energy Corporation (NYSE:CHK), and RenaissanceRe Holdings Ltd. (NYSE:RNR). This group of stocks’ market values are similar to STWD’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SWN | 38 | 569326 | 5 |
| PF | 37 | 1114405 | 5 |
| CHK | 34 | 1211147 | 1 |
| RNR | 19 | 344999 | -7 |
As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $810 million. That figure was $509 million in STWD’s case. Southwestern Energy Company (NYSE:SWN) is the most popular stock in this table. On the other hand RenaissanceRe Holdings Ltd. (NYSE:RNR) is the least popular one with only 19 bullish hedge fund positions. Starwood Property Trust, Inc. (NYSE:STWD) 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 SWN might be a better candidate to consider a long position.
