Hedge funds run by legendary investors like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small-caps are where they can generate significant out-performance. That’s why we pay special attention to hedge fund activity in these stocks.
Hedge fund interest in Mack Cali Realty Corp (NYSE:CLI) shares was flat during the last quarter. This is usually a negative indicator. 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 Matson Inc (NYSE:MATX), Alexander & Baldwin Inc (NYSE:ALEX), and Capitol Federal Financial, Inc. (NASDAQ:CFFN) to gather more data points.
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In today’s marketplace there are numerous tools investors have at their disposal to size up stocks. A duo of the less known tools are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the elite hedge fund managers can beat the broader indices by a very impressive margin (see the details here).
Now, we’re going to view the recent action regarding Mack Cali Realty Corp (NYSE:CLI).
What have hedge funds been doing with Mack Cali Realty Corp (NYSE:CLI)?
Heading into Q4, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from the second quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully (or had already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies has the most valuable position in Mack Cali Realty Corp (NYSE:CLI), worth close to $20.1 million, comprising less than 0.1% of its total 13F portfolio. Sitting in the 2 spot is J. Alan Reid, Jr. of Forward Management, with a $19.2 million position; his fund has 1.5% of its 13F portfolio invested in the stock. Some other peers that hold long positions contain Chuck Royce’s Royce & Associates, David Dreman’s Dreman Value Management, and Israel Englander’s Millennium Management.
Seeing as Mack Cali Realty Corp (NYSE:CLI) has faced a declination in interest from the smart money, we can see that there was a specific group of hedge funds who were dropping their full holdings by the end of the third quarter. Interestingly, John Khoury’s Long Pond Capital sold off the largest position of all the hedgies monitored by Insider Monkey, comprising an estimated $66.2 million in stock. Soros Fund Management, a family office founded by George Soros, also cut its stock, about $38.1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to Mack Cali Realty Corp (NYSE:CLI). We will take a look at Matson Inc (NYSE:MATX), Alexander & Baldwin Inc (NYSE:ALEX), Capitol Federal Financial, Inc. (NASDAQ:CFFN), and Scorpio Tankers Inc. (NYSE:STNG). This group of stocks’ market values are closest to CLI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MATX | 16 | 46522 | -1 |
| ALEX | 12 | 152236 | -7 |
| CFFN | 11 | 112579 | -3 |
| STNG | 30 | 410280 | 0 |
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $180 million. That figure was $123 million in CLI’s case. Scorpio Tankers Inc. (NYSE:STNG) is the most popular stock in this table. On the other hand Capitol Federal Financial, Inc. (NASDAQ:CFFN) is the least popular one with only 11 bullish hedge fund positions. Mack Cali Realty Corp (NYSE:CLI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard STNG might be a better candidate to consider for a long position.
