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Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the fourth quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of The Howard Hughes Corporation (NYSE:HHC) based on that data.
The Howard Hughes Corporation (NYSE:HHC) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 27 hedge funds' portfolios at the end of March. Our calculations also showed that HHC isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Herbalife Nutrition Ltd. (NYSE:HLF), Bank OZK (NASDAQ:OZK), and Kemper Corporation (NYSE:KMPR) to gather more data points.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. With all of this in mind let's take a peek at the recent hedge fund action encompassing The Howard Hughes Corporation (NYSE:HHC).
Do Hedge Funds Think HHC Is A Good Stock To Buy Now?
At the end of March, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HHC over the last 23 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Pershing Square, managed by Bill Ackman, holds the number one position in The Howard Hughes Corporation (NYSE:HHC). Pershing Square has a $1.2814 billion position in the stock, comprising 12.2% of its 13F portfolio. Coming in second is Amy Minella of Cardinal Capital, with a $96.9 million position; the fund has 2.4% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions include Murray Stahl's Horizon Asset Management, Mubadala Investment's MIC Capital Partners and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position MIC Capital Partners allocated the biggest weight to The Howard Hughes Corporation (NYSE:HHC), around 12.44% of its 13F portfolio. Pershing Square is also relatively very bullish on the stock, earmarking 12.25 percent of its 13F equity portfolio to HHC.
Judging by the fact that The Howard Hughes Corporation (NYSE:HHC) has faced falling interest from the aggregate hedge fund industry, logic holds that there is a sect of funds that decided to sell off their positions entirely by the end of the first quarter. Interestingly, Jeffrey Tannenbaum's Fir Tree said goodbye to the biggest stake of the 750 funds tracked by Insider Monkey, worth an estimated $32.8 million in stock. Matthew Mark's fund, Jet Capital Investors, also said goodbye to its stock, about $20.9 million worth. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as The Howard Hughes Corporation (NYSE:HHC) but similarly valued. We will take a look at Herbalife Nutrition Ltd. (NYSE:HLF), Bank OZK (NASDAQ:OZK), Kemper Corporation (NYSE:KMPR), Oscar Health, Inc. (NYSE:OSCR), EQT Corporation (NYSE:EQT), Chart Industries, Inc. (NASDAQ:GTLS), and Cabot Microelectronics Corporation (NASDAQ:CCMP). This group of stocks' market values are closest to HHC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HLF,40,1994608,-1 OZK,25,237162,5 KMPR,11,43239,-2 OSCR,26,1337245,26 EQT,35,437253,-8 GTLS,19,297275,-7 CCMP,19,281932,-3 Average,25,661245,1.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $661 million. That figure was $1619 million in HHC's case. Herbalife Nutrition Ltd. (NYSE:HLF) is the most popular stock in this table. On the other hand Kemper Corporation (NYSE:KMPR) is the least popular one with only 11 bullish hedge fund positions. The Howard Hughes Corporation (NYSE:HHC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HHC is 57.1. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 24% in 2021 through July 9th and beat the market again by 6.7 percentage points. Unfortunately HHC wasn't nearly as popular as these 5 stocks and hedge funds that were betting on HHC were disappointed as the stock returned 0.4% since the end of March (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.