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At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Ventas, Inc. (NYSE:VTR).
Ventas, Inc. (NYSE:VTR) investors should be aware of a decrease in activity from the world's largest hedge funds in recent months. VTR was in 25 hedge funds' portfolios at the end of the first quarter of 2020. There were 29 hedge funds in our database with VTR holdings at the end of the previous quarter. Our calculations also showed that VTR 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.
In the eyes of most traders, hedge funds are viewed as underperforming, old financial vehicles of years past. While there are greater than 8000 funds with their doors open at present, Our experts look at the moguls of this group, around 850 funds. It is estimated that this group of investors command most of all hedge funds' total asset base, and by tracking their first-class investments, Insider Monkey has uncovered a number of investment strategies that have historically outpaced the broader indices. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
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Ricky Sandler of Eminence Capital[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to take a look at the key hedge fund action surrounding Ventas, Inc. (NYSE:VTR).
Hedge fund activity in Ventas, Inc. (NYSE:VTR)
At the end of the first quarter, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards VTR over the last 18 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Camber Capital Management held the most valuable stake in Ventas, Inc. (NYSE:VTR), which was worth $87.1 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $73.2 million worth of shares. Eminence Capital, D E Shaw, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Camber Capital Management allocated the biggest weight to Ventas, Inc. (NYSE:VTR), around 5.2% of its 13F portfolio. Eminence Capital is also relatively very bullish on the stock, designating 0.78 percent of its 13F equity portfolio to VTR.
Judging by the fact that Ventas, Inc. (NYSE:VTR) has experienced a decline in interest from hedge fund managers, we can see that there exists a select few funds who were dropping their positions entirely in the first quarter. Interestingly, John Khoury's Long Pond Capital said goodbye to the biggest position of the 750 funds monitored by Insider Monkey, worth about $239.5 million in stock. Greg Poole's fund, Echo Street Capital Management, also cut its stock, about $30.5 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 4 funds in the first quarter.
Let's check out hedge fund activity in other stocks similar to Ventas, Inc. (NYSE:VTR). These stocks are Godaddy Inc (NYSE:GDDY), CBOE Global Markets Inc (NASDAQ:CBOE), Essential Utilities Inc (NYSE:WTRG), and Zebra Technologies Corporation (NASDAQ:ZBRA). This group of stocks' market caps are similar to VTR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GDDY,54,2247882,3 CBOE,38,780569,11 WTRG,23,518741,2 ZBRA,28,576010,-6 Average,35.75,1030801,2.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.75 hedge funds with bullish positions and the average amount invested in these stocks was $1031 million. That figure was $337 million in VTR's case. Godaddy Inc (NYSE:GDDY) is the most popular stock in this table. On the other hand Essential Utilities Inc (NYSE:WTRG) is the least popular one with only 23 bullish hedge fund positions. Ventas, Inc. (NYSE:VTR) is not the least popular stock in this group but hedge fund interest is still below average. 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 13.9% in 2020 through June 10th and still beat the market by 14.2 percentage points. A small number of hedge funds were also right about betting on VTR as the stock returned 53.4% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.