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Did Hedge Funds Drop The Ball On Brixmor Property Group Inc (BRX) ?

Reymerlyn Martin

With the fourth-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the first quarter. One of these stocks was Brixmor Property Group Inc (NYSE:BRX).

Brixmor Property Group Inc (NYSE:BRX) was in 17 hedge funds' portfolios at the end of the fourth quarter of 2018. BRX has seen a decrease in hedge fund interest in recent months. There were 18 hedge funds in our database with BRX positions at the end of the previous quarter. Our calculations also showed that BRX isn't among the 30 most popular stocks among hedge funds.

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 32 percentage points since May 2014 through March 12, 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 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Clint Carlson, Carlson Capital

We're going to go over the fresh hedge fund action surrounding Brixmor Property Group Inc (NYSE:BRX).

What have hedge funds been doing with Brixmor Property Group Inc (NYSE:BRX)?

At Q4's end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from one quarter earlier. On the other hand, there were a total of 16 hedge funds with a bullish position in BRX a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

BRX_apr2019

More specifically, Renaissance Technologies was the largest shareholder of Brixmor Property Group Inc (NYSE:BRX), with a stake worth $70.3 million reported as of the end of September. Trailing Renaissance Technologies was Zimmer Partners, which amassed a stake valued at $63.3 million. Marshall Wace LLP, Carlson Capital, and Citadel Investment Group were also very fond of the stock, giving the stock large weights in their portfolios.

Because Brixmor Property Group Inc (NYSE:BRX) has experienced falling interest from the entirety of the hedge funds we track, we can see that there lies a certain "tier" of funds who sold off their positions entirely in the third quarter. It's worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital said goodbye to the biggest position of the "upper crust" of funds monitored by Insider Monkey, worth close to $11.2 million in stock, and Glenn Russell Dubin's Highbridge Capital Management was right behind this move, as the fund said goodbye to about $5 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 1 funds in the third quarter.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Brixmor Property Group Inc (NYSE:BRX) but similarly valued. These stocks are National Fuel Gas Company (NYSE:NFG), Quanta Services Inc (NYSE:PWR), Amarin Corporation plc (NASDAQ:AMRN), and Cree, Inc. (NASDAQ:CREE). This group of stocks' market caps are closest to BRX's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NFG,16,216607,0 PWR,27,477082,-7 AMRN,24,1242883,2 CREE,9,226703,-4 Average,19,540819,-2.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $541 million. That figure was $322 million in BRX's case. Quanta Services Inc (NYSE:PWR) is the most popular stock in this table. On the other hand Cree, Inc. (NASDAQ:CREE) is the least popular one with only 9 bullish hedge fund positions. Brixmor Property Group Inc (NYSE:BRX) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on BRX, though not to the same extent, as the stock returned 22.3% and outperformed the market as well.

Disclosure: None. This article was originally published at Insider Monkey.

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