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The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards American Assets Trust, Inc (NYSE:AAT).
Is AAT a good stock to buy now? The smart money was becoming less confident. The number of long hedge fund positions were trimmed by 5 in recent months. American Assets Trust, Inc (NYSE:AAT) was in 15 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 20. Our calculations also showed that AAT isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 20 hedge funds in our database with AAT positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Paul Marshall of Marshall Wace
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we're going to take a look at the key hedge fund action surrounding American Assets Trust, Inc (NYSE:AAT).
Do Hedge Funds Think AAT Is A Good Stock To Buy Now?
At Q3's end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AAT over the last 21 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in American Assets Trust, Inc (NYSE:AAT) was held by Arrowstreet Capital, which reported holding $8.5 million worth of stock at the end of September. It was followed by D E Shaw with a $5.7 million position. Other investors bullish on the company included Marshall Wace LLP, Renaissance Technologies, and AQR Capital Management. In terms of the portfolio weights assigned to each position Steel Canyon Capital allocated the biggest weight to American Assets Trust, Inc (NYSE:AAT), around 1.35% of its 13F portfolio. Weld Capital Management is also relatively very bullish on the stock, setting aside 0.17 percent of its 13F equity portfolio to AAT.
Since American Assets Trust, Inc (NYSE:AAT) has experienced a decline in interest from hedge fund managers, it's safe to say that there exists a select few hedgies that slashed their entire stakes heading into Q4. Interestingly, Michael Gelband's ExodusPoint Capital cut the largest position of the "upper crust" of funds watched by Insider Monkey, valued at close to $1.7 million in stock, and Paul Tudor Jones's Tudor Investment Corp was right behind this move, as the fund cut about $1.2 million worth. These transactions are important to note, as total hedge fund interest fell by 5 funds heading into Q4.
Let's check out hedge fund activity in other stocks similar to American Assets Trust, Inc (NYSE:AAT). We will take a look at AeroVironment, Inc. (NASDAQ:AVAV), Cactus, Inc. (NYSE:WHD), Delphi Technologies PLC (NYSE:DLPH), Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD), Kymera Therapeutics, Inc. (NASDAQ:KYMR), WesBanco, Inc. (NASDAQ:WSBC), and Generation Bio Co. (NASDAQ:GBIO). This group of stocks' market valuations match AAT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AVAV,16,49345,-1 WHD,20,103650,-2 DLPH,29,397481,2 IRWD,24,297292,-8 KYMR,22,313705,22 WSBC,14,43829,1 GBIO,6,162207,-8 Average,18.7,195358,0.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.7 hedge funds with bullish positions and the average amount invested in these stocks was $195 million. That figure was $29 million in AAT's case. Delphi Technologies PLC (NYSE:DLPH) is the most popular stock in this table. On the other hand Generation Bio Co. (NASDAQ:GBIO) is the least popular one with only 6 bullish hedge fund positions. American Assets Trust, Inc (NYSE:AAT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AAT is 42.1. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on AAT as the stock returned 20.3% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.