The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Kite Realty Group Trust (NYSE:KRG).
Kite Realty Group Trust (NYSE:KRG) has experienced a decrease in hedge fund sentiment recently. KRG was in 8 hedge funds' portfolios at the end of March. There were 13 hedge funds in our database with KRG positions at the end of the previous quarter. Our calculations also showed that KRG isn't among the 30 most popular stocks among hedge funds (click for Q1 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 58 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 36% through May 18th. 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="400"] David Harding of Winton Capital Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to take a glance at the new hedge fund action encompassing Kite Realty Group Trust (NYSE:KRG).
How have hedgies been trading Kite Realty Group Trust (NYSE:KRG)?
At Q1's end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -38% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards KRG over the last 18 quarters. With hedge funds' capital changing hands, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
The largest stake in Kite Realty Group Trust (NYSE:KRG) was held by Renaissance Technologies, which reported holding $30.6 million worth of stock at the end of September. It was followed by Winton Capital Management with a $2.8 million position. Other investors bullish on the company included Citadel Investment Group, AQR Capital Management, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Weld Capital Management allocated the biggest weight to Kite Realty Group Trust (NYSE:KRG), around 0.11% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, earmarking 0.07 percent of its 13F equity portfolio to KRG.
Judging by the fact that Kite Realty Group Trust (NYSE:KRG) has faced a decline in interest from the entirety of the hedge funds we track, it's easy to see that there is a sect of funds that slashed their entire stakes by the end of the first quarter. It's worth mentioning that Mark Coe's Intrinsic Edge Capital dropped the biggest stake of the 750 funds followed by Insider Monkey, valued at close to $2.5 million in stock. Steve Cohen's fund, Point72 Asset Management, also cut its stock, about $2.2 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 5 funds by the end of the first quarter.
Let's now review hedge fund activity in other stocks similar to Kite Realty Group Trust (NYSE:KRG). We will take a look at NMI Holdings Inc (NASDAQ:NMIH), Jack in the Box Inc. (NASDAQ:JACK), Central European Media Enterprises Ltd. (NASDAQ:CETV), and Astec Industries, Inc. (NASDAQ:ASTE). All of these stocks' market caps are similar to KRG's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NMIH,23,90878,2 JACK,28,158985,2 CETV,11,36910,1 ASTE,10,95666,1 Average,18,95610,1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $96 million. That figure was $39 million in KRG's case. Jack in the Box Inc. (NASDAQ:JACK) is the most popular stock in this table. On the other hand Astec Industries, Inc. (NASDAQ:ASTE) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Kite Realty Group Trust (NYSE:KRG) is even less popular than ASTE. Hedge funds clearly dropped the ball on KRG as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th and still beat the market by 14.8 percentage points. A small number of hedge funds were also right about betting on KRG as the stock returned 25.9% so far in the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.