After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of March 31. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards American Campus Communities, Inc. (NYSE:ACC).
Is American Campus Communities, Inc. (NYSE:ACC) the right pick for your portfolio? The smart money is buying. The number of bullish hedge fund positions improved by 3 in recent months. Our calculations also showed that acc isn't among the 30 most popular stocks among hedge funds. ACC was in 19 hedge funds' portfolios at the end of the first quarter of 2019. There were 16 hedge funds in our database with ACC positions at the end of the previous quarter.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's take a look at the key hedge fund action surrounding American Campus Communities, Inc. (NYSE:ACC).
How are hedge funds trading American Campus Communities, Inc. (NYSE:ACC)?
At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ACC over the last 15 quarters. With the smart money's sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
More specifically, Diamond Hill Capital was the largest shareholder of American Campus Communities, Inc. (NYSE:ACC), with a stake worth $93 million reported as of the end of March. Trailing Diamond Hill Capital was AEW Capital Management, which amassed a stake valued at $73.2 million. Citadel Investment Group, Winton Capital Management, and Millennium Management were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, specific money managers have jumped into American Campus Communities, Inc. (NYSE:ACC) headfirst. Tudor Investment Corp, managed by Paul Tudor Jones, created the most outsized position in American Campus Communities, Inc. (NYSE:ACC). Tudor Investment Corp had $1.5 million invested in the company at the end of the quarter. Matthew Tewksbury's Stevens Capital Management also initiated a $1.2 million position during the quarter. The other funds with new positions in the stock are Minhua Zhang's Weld Capital Management, Jeffrey Talpins's Element Capital Management, and Michael Gelband's ExodusPoint Capital.
Let's also examine hedge fund activity in other stocks similar to American Campus Communities, Inc. (NYSE:ACC). We will take a look at Logitech International SA (NASDAQ:LOGI), Aqua America Inc (NYSE:WTR), Pool Corporation (NASDAQ:POOL), and Phillips 66 Partners LP (NYSE:PSXP). This group of stocks' market valuations are similar to ACC's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LOGI,15,239756,1 WTR,15,138874,-4 POOL,16,248823,-1 PSXP,4,9165,-2 Average,12.5,159155,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $159 million. That figure was $322 million in ACC's case. Pool Corporation (NASDAQ:POOL) is the most popular stock in this table. On the other hand Phillips 66 Partners LP (NYSE:PSXP) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks American Campus Communities, Inc. (NYSE:ACC) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately ACC wasn't nearly as popular as these 20 stocks and hedge funds that were betting on ACC were disappointed as the stock returned -2.6% during the same 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 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.