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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 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider Arbor Realty Trust, Inc. (NYSE:ABR) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Arbor Realty Trust, Inc. (NYSE:ABR) investors should pay attention to an increase in support from the world's most elite money managers recently. Arbor Realty Trust, Inc. (NYSE:ABR) was in 21 hedge funds' portfolios at the end of March. The all time high for this statistic is 21. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ABR isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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. Keeping this in mind we're going to take a peek at the fresh hedge fund action encompassing Arbor Realty Trust, Inc. (NYSE:ABR).
Do Hedge Funds Think ABR Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from one quarter earlier. On the other hand, there were a total of 14 hedge funds with a bullish position in ABR a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
The largest stake in Arbor Realty Trust, Inc. (NYSE:ABR) was held by Omega Advisors, which reported holding $34.2 million worth of stock at the end of December. It was followed by Marshall Wace LLP with a $16.3 million position. Other investors bullish on the company included Millennium Management, D E Shaw, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Omega Advisors allocated the biggest weight to Arbor Realty Trust, Inc. (NYSE:ABR), around 2.14% of its 13F portfolio. Pinz Capital is also relatively very bullish on the stock, setting aside 1.41 percent of its 13F equity portfolio to ABR.
Consequently, key hedge funds were leading the bulls' herd. Pinz Capital, managed by Matthew L Pinz, created the largest position in Arbor Realty Trust, Inc. (NYSE:ABR). Pinz Capital had $5.3 million invested in the company at the end of the quarter. Benjamin A. Smith's Laurion Capital Management also made a $4.8 million investment in the stock during the quarter. The other funds with brand new ABR positions are Renaissance Technologies, Mike Vranos's Ellington, and Michael Gelband's ExodusPoint Capital.
Let's also examine hedge fund activity in other stocks similar to Arbor Realty Trust, Inc. (NYSE:ABR). These stocks are Dillard's, Inc. (NYSE:DDS), Quanterix Corporation (NASDAQ:QTRX), Axsome Therapeutics, Inc. (NASDAQ:AXSM), Heartland Financial USA Inc (NASDAQ:HTLF), CSW Industrials, Inc. (NASDAQ:CSWI), Purple Innovation, Inc. (NASDAQ:PRPL), and Criteo SA (NASDAQ:CRTO). This group of stocks' market valuations are closest to ABR's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DDS,13,11676,-2 QTRX,19,177897,0 AXSM,17,354033,-5 HTLF,12,45440,2 CSWI,13,35518,0 PRPL,24,762061,-9 CRTO,16,126253,3 Average,16.3,216125,-1.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.3 hedge funds with bullish positions and the average amount invested in these stocks was $216 million. That figure was $104 million in ABR's case. Purple Innovation, Inc. (NASDAQ:PRPL) is the most popular stock in this table. On the other hand Heartland Financial USA Inc (NASDAQ:HTLF) is the least popular one with only 12 bullish hedge fund positions. Arbor Realty Trust, Inc. (NYSE:ABR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ABR is 77.5. 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 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Hedge funds were also right about betting on ABR, though not to the same extent, as the stock returned 13.6% since Q1 (through July 16th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.