The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Kimco Realty Corp (NYSE:KIM) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Kimco Realty Corp (NYSE:KIM) has seen an increase in hedge fund sentiment lately. Kimco Realty Corp (NYSE:KIM) was in 28 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 22. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that KIM isn't among the 30 most popular stocks among hedge funds (click for Q2 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 21st century investor’s toolkit there are dozens of gauges stock traders have at their disposal to value publicly traded companies. A pair of the most innovative gauges are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the top money managers can outpace the S&P 500 by a very impressive amount (see the details here).
Stuart Zimmer of Zimmer Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. With all of this in mind we're going to take a look at the key hedge fund action encompassing Kimco Realty Corp (NYSE:KIM).
What have hedge funds been doing with Kimco Realty Corp (NYSE:KIM)?
At second quarter's end, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 27% from the previous quarter. By comparison, 19 hedge funds held shares or bullish call options in KIM a year ago. With hedge funds' sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Among these funds, Zimmer Partners held the most valuable stake in Kimco Realty Corp (NYSE:KIM), which was worth $67.4 million at the end of the third quarter. On the second spot was Waterfront Capital Partners which amassed $18.3 million worth of shares. Kettle Hill Capital Management, Citadel Investment Group, 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 Hill Winds Capital allocated the biggest weight to Kimco Realty Corp (NYSE:KIM), around 4.43% of its 13F portfolio. Kettle Hill Capital Management is also relatively very bullish on the stock, setting aside 4.26 percent of its 13F equity portfolio to KIM.
As industrywide interest jumped, specific money managers have jumped into Kimco Realty Corp (NYSE:KIM) headfirst. Zimmer Partners, managed by Stuart J. Zimmer, assembled the most outsized position in Kimco Realty Corp (NYSE:KIM). Zimmer Partners had $67.4 million invested in the company at the end of the quarter. Eduardo Abush's Waterfront Capital Partners also initiated a $18.3 million position during the quarter. The other funds with brand new KIM positions are Andrew Kurita's Kettle Hill Capital Management, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, and Matthew Crandall Gilman's Hill Winds Capital.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Kimco Realty Corp (NYSE:KIM) but similarly valued. These stocks are Teck Resources Ltd (NYSE:TECK), SolarWinds Corporation (NYSE:SWI), Casey's General Stores, Inc. (NASDAQ:CASY), LHC Group, Inc. (NASDAQ:LHCG), Prosperity Bancshares, Inc. (NYSE:PB), Legend Biotech Corporation (NASDAQ:LEGN), and Deckers Outdoor Corp (NYSE:DECK). This group of stocks' market values match KIM's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TECK,25,329603,1 SWI,19,2364868,5 CASY,23,152316,0 LHCG,30,159342,3 PB,27,109165,11 LEGN,28,551006,28 DECK,47,857767,16 Average,28.4,646295,9.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.4 hedge funds with bullish positions and the average amount invested in these stocks was $646 million. That figure was $171 million in KIM's case. Deckers Outdoor Corp (NYSE:DECK) is the most popular stock in this table. On the other hand SolarWinds Corporation (NYSE:SWI) is the least popular one with only 19 bullish hedge fund positions. Kimco Realty Corp (NYSE:KIM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KIM is 56.1. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 21.3% in 2020 through September 25th and surpassed the market by 17.7 percentage points. Unfortunately KIM wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); KIM investors were disappointed as the stock returned -11.9% since Q2 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.