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A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Cousins Properties Incorporated (NYSE:CUZ).
Is CUZ a good stock to buy now? Cousins Properties Incorporated (NYSE:CUZ) was in 13 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 22. CUZ shareholders have witnessed a decrease in support from the world's most elite money managers lately. There were 19 hedge funds in our database with CUZ positions at the end of the second quarter. Our calculations also showed that CUZ 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.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (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 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
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. Now we're going to check out the latest hedge fund action encompassing Cousins Properties Incorporated (NYSE:CUZ).
Do Hedge Funds Think CUZ Is A Good Stock To Buy Now?
At third quarter's end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of -32% from the previous quarter. By comparison, 19 hedge funds held shares or bullish call options in CUZ a year ago. With hedgies' sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Ken Griffin's Citadel Investment Group has the largest position in Cousins Properties Incorporated (NYSE:CUZ), worth close to $44.1 million, amounting to less than 0.1%% of its total 13F portfolio. On Citadel Investment Group's heels is Israel Englander of Millennium Management, with a $24 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism comprise Daniel Johnson's Gillson Capital, Matthew Crandall Gilman's Hill Winds Capital and Austin Wiggins Hopper's AWH Capital. In terms of the portfolio weights assigned to each position Hill Winds Capital allocated the biggest weight to Cousins Properties Incorporated (NYSE:CUZ), around 3.76% of its 13F portfolio. AWH Capital is also relatively very bullish on the stock, dishing out 1.35 percent of its 13F equity portfolio to CUZ.
Judging by the fact that Cousins Properties Incorporated (NYSE:CUZ) has experienced bearish sentiment from the entirety of the hedge funds we track, we can see that there were a few funds who were dropping their positions entirely by the end of the third quarter. Intriguingly, Josh Donfeld and David Rogers's Castle Hook Partners dumped the biggest investment of the 750 funds tracked by Insider Monkey, worth close to $10.6 million in stock, and Renaissance Technologies was right behind this move, as the fund dumped about $5.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 6 funds by the end of the third quarter.
Let's now take a look at hedge fund activity in other stocks similar to Cousins Properties Incorporated (NYSE:CUZ). We will take a look at PVH Corp (NYSE:PVH), Stamps.com Inc. (NASDAQ:STMP), Simpson Manufacturing Co, Inc. (NYSE:SSD), Bandwidth Inc. (NASDAQ:BAND), Texas Roadhouse Inc (NASDAQ:TXRH), PennyMac Financial Services Inc (NYSE:PFSI), and II-VI, Inc. (NASDAQ:IIVI). This group of stocks' market valuations match CUZ's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PVH,28,713571,0 STMP,31,664086,1 SSD,17,187561,-4 BAND,30,344258,0 TXRH,22,337281,-3 PFSI,31,443555,6 IIVI,24,104148,-4 Average,26.1,399209,-0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.1 hedge funds with bullish positions and the average amount invested in these stocks was $399 million. That figure was $84 million in CUZ's case. Stamps.com Inc. (NASDAQ:STMP) is the most popular stock in this table. On the other hand Simpson Manufacturing Co, Inc. (NYSE:SSD) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Cousins Properties Incorporated (NYSE:CUZ) is even less popular than SSD. Our overall hedge fund sentiment score for CUZ is 16.7. 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. Hedge funds clearly dropped the ball on CUZ as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on CUZ as the stock returned 16.6% since Q3 (through December 8th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.