The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought CBL & Associates Properties, Inc. (NYSE:CBL) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
CBL & Associates Properties, Inc. (NYSE:CBL) investors should be aware of an increase in support from the world's most elite money managers of late. CBL & Associates Properties, Inc. (NYSE:CBL) was in 18 hedge funds' portfolios at the end of June. The all time high for this statistics is 21. Our calculations also showed that CBL isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). 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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 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.
Michael Hintze of CQS Cayman LP
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 are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world 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 to get excerpts of these letters in your inbox. With all of this in mind let's take a gander at the fresh hedge fund action surrounding CBL & Associates Properties, Inc. (NYSE:CBL).
What does smart money think about CBL & Associates Properties, Inc. (NYSE:CBL)?
Heading into the third quarter of 2020, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from the first quarter of 2020. On the other hand, there were a total of 9 hedge funds with a bullish position in CBL a year ago. With hedgies' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the biggest position in CBL & Associates Properties, Inc. (NYSE:CBL). Renaissance Technologies has a $1.9 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Millennium Management, led by Israel Englander, holding a $1.4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other professional money managers that are bullish comprise Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Cliff Asness's AQR Capital Management and Michael Hintze's CQS Cayman LP. In terms of the portfolio weights assigned to each position Iszo Capital allocated the biggest weight to CBL & Associates Properties, Inc. (NYSE:CBL), around 0.22% of its 13F portfolio. CQS Cayman LP is also relatively very bullish on the stock, dishing out 0.02 percent of its 13F equity portfolio to CBL.
As aggregate interest increased, some big names have jumped into CBL & Associates Properties, Inc. (NYSE:CBL) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most outsized position in CBL & Associates Properties, Inc. (NYSE:CBL). Arrowstreet Capital had $1.1 million invested in the company at the end of the quarter. Cliff Asness's AQR Capital Management also made a $0.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Donald Sussman's Paloma Partners, Ben Levine, Andrew Manuel and Stefan Renold's LMR Partners, and Michael Gelband's ExodusPoint Capital.
Let's now review hedge fund activity in other stocks similar to CBL & Associates Properties, Inc. (NYSE:CBL). These stocks are Equillium, Inc. (NASDAQ:EQ), Infinity Pharmaceuticals Inc. (NASDAQ:INFI), AgEagle Aerial Systems, Inc. (NYSE:UAVS), Grindrod Shipping Holdings Ltd. (NASDAQ:GRIN), Network-1 Technologies Inc (NYSE:NTIP), Zion Oil & Gas Inc (NASDAQ:ZN), and HyreCar Inc. (NASDAQ:HYRE). All of these stocks' market caps match CBL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EQ,4,1279,1 INFI,5,18619,0 UAVS,1,195,0 GRIN,2,3246,0 NTIP,2,2879,0 ZN,3,14,1 HYRE,6,9893,1 Average,3.3,5161,0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.3 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $7 million in CBL's case. HyreCar Inc. (NASDAQ:HYRE) is the most popular stock in this table. On the other hand AgEagle Aerial Systems, Inc. (NYSE:UAVS) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks CBL & Associates Properties, Inc. (NYSE:CBL) is more popular among hedge funds. Our overall hedge fund sentiment score for CBL is 85.7. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and still beat the market by 19.3 percentage points. Unfortunately CBL wasn't nearly as popular as these 10 stocks and hedge funds that were betting on CBL were disappointed as the stock returned -40.7% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.