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. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider VICI Properties Inc. (NYSE:VICI) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
VICI Properties Inc. (NYSE:VICI) has experienced a decrease in support from the world's most elite money managers recently. Our calculations also showed that VICI 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' 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 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
[caption id="attachment_324853" align="aligncenter" width="450"] Joshua Friedman of Canyon Capital Advisors[/caption]
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. Let's view the latest hedge fund action encompassing VICI Properties Inc. (NYSE:VICI).
What have hedge funds been doing with VICI Properties Inc. (NYSE:VICI)?
At Q3's end, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -37% from the previous quarter. On the other hand, there were a total of 39 hedge funds with a bullish position in VICI a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in VICI Properties Inc. (NYSE:VICI) was held by Canyon Capital Advisors, which reported holding $507.4 million worth of stock at the end of September. It was followed by Soros Fund Management with a $419.8 million position. Other investors bullish on the company included Senator Investment Group, Citadel Investment Group, and Point72 Asset Management. In terms of the portfolio weights assigned to each position Soros Fund Management allocated the biggest weight to VICI Properties Inc. (NYSE:VICI), around 11.63% of its portfolio. Canyon Capital Advisors is also relatively very bullish on the stock, setting aside 10.95 percent of its 13F equity portfolio to VICI.
Seeing as VICI Properties Inc. (NYSE:VICI) has faced bearish sentiment from the smart money, it's easy to see that there were a few hedge funds who were dropping their entire stakes in the third quarter. Intriguingly, Stuart J. Zimmer's Zimmer Partners said goodbye to the largest stake of all the hedgies followed by Insider Monkey, comprising an estimated $90.9 million in stock, and Jeffrey Furber's AEW Capital Management was right behind this move, as the fund cut about $74.8 million worth. These moves are interesting, as total hedge fund interest was cut by 22 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as VICI Properties Inc. (NYSE:VICI) but similarly valued. These stocks are RingCentral Inc (NYSE:RNG), Wayfair Inc (NYSE:W), Federal Realty Investment Trust (NYSE:FRT), and Mylan N.V. (NASDAQ:MYL). This group of stocks' market caps resemble VICI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RNG,48,1615607,3 W,30,1831086,-2 FRT,22,146584,-1 MYL,33,1718513,3 Average,33.25,1327948,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.25 hedge funds with bullish positions and the average amount invested in these stocks was $1328 million. That figure was $2263 million in VICI's case. RingCentral Inc (NYSE:RNG) is the most popular stock in this table. On the other hand Federal Realty Investment Trust (NYSE:FRT) is the least popular one with only 22 bullish hedge fund positions. VICI Properties Inc. (NYSE:VICI) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on VICI, though not to the same extent, as the stock returned 9.2% during the first two months of the fourth quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
How to Best Use Insider Monkey To Increase Your Returns
25 Biggest Hedge Funds In The World
Greenlight Capital 2019 Q3 Investor Letter