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Hedge Funds Are Piling Into Healthcare Trust Of America Inc (HTA)

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While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Healthcare Trust Of America Inc (NYSE:HTA).

Healthcare Trust Of America Inc (NYSE:HTA) was in 23 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. HTA shareholders have witnessed an increase in hedge fund sentiment in recent months. There were 17 hedge funds in our database with HTA positions at the end of the first quarter. Our calculations also showed that HTA isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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David E. Shaw of D.E. Shaw
David E. Shaw of D.E. Shaw

David E. Shaw of D.E. Shaw

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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 look at the new hedge fund action encompassing Healthcare Trust Of America Inc (NYSE:HTA).

Do Hedge Funds Think HTA Is A Good Stock To Buy Now?

At second quarter's end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 35% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards HTA over the last 24 quarters. With hedge funds' sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

The largest stake in Healthcare Trust Of America Inc (NYSE:HTA) was held by V3 Capital, which reported holding $62.5 million worth of stock at the end of June. It was followed by Millennium Management with a $52 million position. Other investors bullish on the company included Citadel Investment Group, Balyasny Asset Management, and Waterfront Capital Partners. In terms of the portfolio weights assigned to each position V3 Capital allocated the biggest weight to Healthcare Trust Of America Inc (NYSE:HTA), around 10.59% of its 13F portfolio. Waterfront Capital Partners is also relatively very bullish on the stock, earmarking 1.3 percent of its 13F equity portfolio to HTA.

Now, key hedge funds were breaking ground themselves. V3 Capital, managed by Charles Fitzgerald, assembled the biggest position in Healthcare Trust Of America Inc (NYSE:HTA). V3 Capital had $62.5 million invested in the company at the end of the quarter. Eduardo Abush's Waterfront Capital Partners also initiated a $17.3 million position during the quarter. The other funds with brand new HTA positions are D. E. Shaw's D E Shaw, Greg Poole's Echo Street Capital Management, and Renee Yao's Neo Ivy Capital.

Let's now review hedge fund activity in other stocks similar to Healthcare Trust Of America Inc (NYSE:HTA). These stocks are South State Corporation (NASDAQ:SSB), Nordstrom, Inc. (NYSE:JWN), Shell Midstream Partners LP (NYSE:SHLX), Unum Group (NYSE:UNM), Ardagh Group S.A. (NYSE:ARD), Nextera Energy Partners LP (NYSE:NEP), and CoreSite Realty Corp (NYSE:COR). This group of stocks' market caps resemble HTA's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SSB,18,298543,-6 JWN,31,445649,-3 SHLX,4,32323,0 UNM,23,324091,-10 ARD,13,135477,2 NEP,22,171287,5 COR,16,198819,1 Average,18.1,229456,-1.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.1 hedge funds with bullish positions and the average amount invested in these stocks was $229 million. That figure was $226 million in HTA's case. Nordstrom, Inc. (NYSE:JWN) is the most popular stock in this table. On the other hand Shell Midstream Partners LP (NYSE:SHLX) is the least popular one with only 4 bullish hedge fund positions. Healthcare Trust Of America Inc (NYSE:HTA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HTA is 75.2. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on HTA as the stock returned 24.8% since the end of Q2 (through 10/22) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.