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The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Equity Lifestyle Properties, Inc. (NYSE:ELS).
Equity Lifestyle Properties, Inc. (NYSE:ELS) was in 29 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 31. ELS has seen an increase in hedge fund sentiment in recent months. There were 24 hedge funds in our database with ELS positions at the end of the fourth quarter. Our calculations also showed that ELS isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Noam Gottesman of GLG Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we're going to review the recent hedge fund action encompassing Equity Lifestyle Properties, Inc. (NYSE:ELS).
Do Hedge Funds Think ELS Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 21% from one quarter earlier. On the other hand, there were a total of 31 hedge funds with a bullish position in ELS a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Equity Lifestyle Properties, Inc. (NYSE:ELS) was held by Long Pond Capital, which reported holding $114.1 million worth of stock at the end of December. It was followed by Renaissance Technologies with a $102.2 million position. Other investors bullish on the company included D E Shaw, Waratah Capital Advisors, and GLG Partners. In terms of the portfolio weights assigned to each position Long Pond Capital allocated the biggest weight to Equity Lifestyle Properties, Inc. (NYSE:ELS), around 3.9% of its 13F portfolio. V3 Capital is also relatively very bullish on the stock, dishing out 2.31 percent of its 13F equity portfolio to ELS.
As aggregate interest increased, key hedge funds were leading the bulls' herd. V3 Capital, managed by Charles Fitzgerald, initiated the biggest position in Equity Lifestyle Properties, Inc. (NYSE:ELS). V3 Capital had $12.4 million invested in the company at the end of the quarter. Paul Tudor Jones's Tudor Investment Corp also made a $4.4 million investment in the stock during the quarter. The following funds were also among the new ELS investors: Minhua Zhang's Weld Capital Management, Gavin Saitowitz and Cisco J. del Valle's Prelude Capital (previously Springbok Capital), and Bruce Kovner's Caxton Associates LP.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Equity Lifestyle Properties, Inc. (NYSE:ELS) but similarly valued. These stocks are Black Knight, Inc. (NYSE:BKI), Invesco Ltd. (NYSE:IVZ), Erie Indemnity Company (NASDAQ:ERIE), Jack Henry & Associates, Inc. (NASDAQ:JKHY), Nordson Corporation (NASDAQ:NDSN), Tapestry, Inc. (NYSE:TPR), and Weibo Corp (NASDAQ:WB). This group of stocks' market valuations resemble ELS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BKI,40,821783,-4 IVZ,32,1240235,-2 ERIE,12,61677,5 JKHY,20,197513,-8 NDSN,26,179502,5 TPR,50,1166145,1 WB,12,118275,-1 Average,27.4,540733,-0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.4 hedge funds with bullish positions and the average amount invested in these stocks was $541 million. That figure was $621 million in ELS's case. Tapestry, Inc. (NYSE:TPR) is the most popular stock in this table. On the other hand Erie Indemnity Company (NASDAQ:ERIE) is the least popular one with only 12 bullish hedge fund positions. Equity Lifestyle Properties, Inc. (NYSE:ELS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ELS is 60.4. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.8% in 2021 through July 2nd and still beat the market by 6 percentage points. Hedge funds were also right about betting on ELS as the stock returned 18.7% since the end of Q1 (through 7/2) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.