The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Rexford Industrial Realty Inc (NYSE:REXR).
Hedge fund interest in Rexford Industrial Realty Inc (NYSE:REXR) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare REXR to other stocks including Silicon Laboratories (NASDAQ:SLAB), Crane Co. (NYSE:CR), and Emcor Group Inc (NYSE:EME) to get a better sense of its popularity. 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' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_26092" align="aligncenter" width="600"] Joel Greenblatt of Gotham Asset Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. We're going to take a look at the recent hedge fund action surrounding Rexford Industrial Realty Inc (NYSE:REXR).
Hedge fund activity in Rexford Industrial Realty Inc (NYSE:REXR)
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 13 hedge funds with a bullish position in REXR a year ago. With the smart money's sentiment swirling, there exists a few key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Rexford Industrial Realty Inc (NYSE:REXR), with a stake worth $14.2 million reported as of the end of September. Trailing Renaissance Technologies was Balyasny Asset Management, which amassed a stake valued at $13.1 million. Millennium Management, Carlson Capital, and Driehaus Capital 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 Perella Weinberg Partners allocated the biggest weight to Rexford Industrial Realty Inc (NYSE:REXR), around 0.26% of its 13F portfolio. Carlson Capital is also relatively very bullish on the stock, designating 0.2 percent of its 13F equity portfolio to REXR.
Because Rexford Industrial Realty Inc (NYSE:REXR) has witnessed falling interest from the smart money, logic holds that there was a specific group of money managers who were dropping their entire stakes in the third quarter. It's worth mentioning that Jeffrey Furber's AEW Capital Management sold off the biggest stake of the "upper crust" of funds watched by Insider Monkey, valued at close to $108.3 million in stock, and David E. Shaw's D E Shaw was right behind this move, as the fund said goodbye to about $2.2 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Rexford Industrial Realty Inc (NYSE:REXR) but similarly valued. We will take a look at Silicon Laboratories (NASDAQ:SLAB), Crane Co. (NYSE:CR), Emcor Group Inc (NYSE:EME), and Blackstone Mortgage Trust Inc (NYSE:BXMT). All of these stocks' market caps are similar to REXR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SLAB,19,71884,1 CR,21,336467,-5 EME,25,242826,3 BXMT,15,84778,-5 Average,20,183989,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $184 million. That figure was $68 million in REXR's case. Emcor Group Inc (NYSE:EME) is the most popular stock in this table. On the other hand Blackstone Mortgage Trust Inc (NYSE:BXMT) is the least popular one with only 15 bullish hedge fund positions. Rexford Industrial Realty Inc (NYSE:REXR) is not the least popular stock in this group but hedge fund interest is still below 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. A small number of hedge funds were also right about betting on REXR, though not to the same extent, as the stock returned 8.7% during the first two months of the fourth quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.