We can judge whether SITE Centers Corp. (NYSE:SITC) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
SITE Centers Corp. (NYSE:SITC) investors should pay attention to a decrease in enthusiasm from smart money recently. Our calculations also showed that SITC isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to 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 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 Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_189632" align="aligncenter" width="600"] David Harding of Winton Capital Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's take a peek at the recent hedge fund action surrounding SITE Centers Corp. (NYSE:SITC).
Hedge fund activity in SITE Centers Corp. (NYSE:SITC)
At Q3's end, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of -27% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards SITC over the last 17 quarters. With the smart money's capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Griffin's Citadel Investment Group has the number one position in SITE Centers Corp. (NYSE:SITC), worth close to $32 million, corresponding to less than 0.1%% of its total 13F portfolio. The second largest stake is held by Gillson Capital, led by Daniel Johnson, holding a $6.4 million position; 0.6% of its 13F portfolio is allocated to the stock. Some other members of the smart money that hold long positions comprise Renaissance Technologies, Israel Englander's Millennium Management and John Overdeck and David Siegel's Two Sigma Advisors. In terms of the portfolio weights assigned to each position Gillson Capital allocated the biggest weight to SITE Centers Corp. (NYSE:SITC), around 0.59% of its 13F portfolio. Ancora Advisors is also relatively very bullish on the stock, dishing out 0.06 percent of its 13F equity portfolio to SITC.
Because SITE Centers Corp. (NYSE:SITC) has witnessed declining sentiment from the entirety of the hedge funds we track, it's easy to see that there is a sect of hedge funds that decided to sell off their entire stakes in the third quarter. Interestingly, Ken Heebner's Capital Growth Management dumped the largest stake of the "upper crust" of funds tracked by Insider Monkey, comprising an estimated $19.1 million in stock. Donald Sussman's fund, Paloma Partners, also said goodbye to its stock, about $0.9 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 4 funds in the third quarter.
Let's now review hedge fund activity in other stocks similar to SITE Centers Corp. (NYSE:SITC). We will take a look at Delek US Holdings, Inc. (NYSE:DK), Taylor Morrison Home Corp (NYSE:TMHC), Transocean Ltd (NYSE:RIG), and SINA Corp (NASDAQ:SINA). This group of stocks' market valuations are similar to SITC's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DK,21,87212,3 TMHC,24,375208,5 RIG,36,256394,5 SINA,19,256685,0 Average,25,243875,3.25 [/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 $244 million. That figure was $55 million in SITC's case. Transocean Ltd (NYSE:RIG) is the most popular stock in this table. On the other hand SINA Corp (NASDAQ:SINA) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks SITE Centers Corp. (NYSE:SITC) is even less popular than SINA. Hedge funds dodged a bullet by taking a bearish stance towards SITC. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately SITC wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); SITC investors were disappointed as the stock returned -4.1% during the fourth quarter (through the end of November) 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 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.