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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of CoreSite Realty Corp (NYSE:COR).
Is COR a good stock to buy? CoreSite Realty Corp (NYSE:COR) was in 19 hedge funds' portfolios at the end of September. The all time high for this statistic is 23. COR has seen a decrease in enthusiasm from smart money recently. There were 21 hedge funds in our database with COR positions at the end of the second quarter. Our calculations also showed that COR 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).
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.
Louis Navellier of Navellier & Associates
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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. Keeping this in mind we're going to analyze the fresh hedge fund action surrounding CoreSite Realty Corp (NYSE:COR).
Do Hedge Funds Think COR Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from the second quarter of 2020. By comparison, 17 hedge funds held shares or bullish call options in COR a year ago. With hedgies' sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies has the most valuable position in CoreSite Realty Corp (NYSE:COR), worth close to $39.4 million, corresponding to less than 0.1%% of its total 13F portfolio. Coming in second is Fisher Asset Management, managed by Ken Fisher, which holds a $27.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism consist of John Osterweis's Osterweis Capital Management, Eduardo Abush's Waterfront Capital Partners and Dmitry Balyasny's Balyasny Asset Management. In terms of the portfolio weights assigned to each position Waterfront Capital Partners allocated the biggest weight to CoreSite Realty Corp (NYSE:COR), around 2.79% of its 13F portfolio. Osterweis Capital Management is also relatively very bullish on the stock, designating 1.68 percent of its 13F equity portfolio to COR.
Seeing as CoreSite Realty Corp (NYSE:COR) has faced falling interest from the aggregate hedge fund industry, we can see that there was a specific group of hedge funds that elected to cut their positions entirely in the third quarter. Intriguingly, Josh Donfeld and David Rogers's Castle Hook Partners cut the biggest stake of all the hedgies followed by Insider Monkey, comprising close to $11.2 million in stock, and Israel Englander's Millennium Management was right behind this move, as the fund dumped about $9.8 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as CoreSite Realty Corp (NYSE:COR) but similarly valued. We will take a look at Apartment Investment and Management Co. (NYSE:AIV), Nomad Foods Limited (NYSE:NOMD), Oshkosh Corporation (NYSE:OSK), Woodward Inc (NASDAQ:WWD), The Wendy's Company (NASDAQ:WEN), The Middleby Corporation (NASDAQ:MIDD), and Ultragenyx Pharmaceutical Inc (NASDAQ:RARE). All of these stocks' market caps resemble COR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AIV,25,484646,1 NOMD,31,381203,-3 OSK,29,203174,2 WWD,24,506782,3 WEN,27,1080122,-5 MIDD,30,282005,4 RARE,20,311362,-4 Average,26.6,464185,-0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.6 hedge funds with bullish positions and the average amount invested in these stocks was $464 million. That figure was $164 million in COR's case. Nomad Foods Limited (NYSE:NOMD) is the most popular stock in this table. On the other hand Ultragenyx Pharmaceutical Inc (NASDAQ:RARE) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks CoreSite Realty Corp (NYSE:COR) is even less popular than RARE. Our overall hedge fund sentiment score for COR is 27.8. 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. Hedge funds dodged a bullet by taking a bearish stance towards COR. Our calculations showed that the top 20 most popular hedge fund stocks 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 but managed to beat the market again by 15.8 percentage points. Unfortunately COR wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); COR investors were disappointed as the stock returned -0.1% since the end of the third quarter (through 12/14) 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 most of these stocks already outperformed the market so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
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