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Hedge Funds Are Piling Into W.P. Carey Inc. (WPC)

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At Insider Monkey, we pore over the filings of nearly 873 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of June 30th. In this article, we will use that wealth of knowledge to determine whether or not W.P. Carey Inc. (NYSE:WPC) makes for a good investment right now.

Is W.P. Carey Inc. (NYSE:WPC) a buy here? Money managers were becoming more confident. The number of long hedge fund bets advanced by 6 in recent months. W.P. Carey Inc. (NYSE:WPC) was in 29 hedge funds' portfolios at the end of June. The all time high for this statistic was previously 23. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that WPC isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

To most stock holders, hedge funds are assumed to be worthless, outdated investment vehicles of yesteryear. While there are more than 8000 funds in operation at the moment, Our experts choose to focus on the upper echelon of this club, around 850 funds. Most estimates calculate that this group of people preside over the majority of all hedge funds' total capital, and by tracking their top stock picks, Insider Monkey has determined numerous investment strategies that have historically beaten the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Dmitry Balyasny of Balyasny Asset Managemnet
Dmitry Balyasny of Balyasny Asset Managemnet

Dmitry Balyasny of Balyasny Asset Management

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. Now we're going to take a gander at the latest hedge fund action encompassing W.P. Carey Inc. (NYSE:WPC).

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

At second quarter's end, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 26% from the previous quarter. By comparison, 23 hedge funds held shares or bullish call options in WPC a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Millennium Management, managed by Israel Englander, holds the number one position in W.P. Carey Inc. (NYSE:WPC). Millennium Management has a $40.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Paul Marshall and Ian Wace of Marshall Wace LLP, with a $28.1 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other members of the smart money with similar optimism consist of Dmitry Balyasny's Balyasny Asset Management, and J. Alan Reid, Jr.'s Forward Management. In terms of the portfolio weights assigned to each position Pinz Capital allocated the biggest weight to W.P. Carey Inc. (NYSE:WPC), around 1.53% of its 13F portfolio. Forward Management is also relatively very bullish on the stock, designating 0.93 percent of its 13F equity portfolio to WPC.

As industrywide interest jumped, key hedge funds have jumped into W.P. Carey Inc. (NYSE:WPC) headfirst. Prelude Capital (previously Springbok Capital), managed by Gavin Saitowitz and Cisco J. del Valle, initiated the largest call position in W.P. Carey Inc. (NYSE:WPC). Prelude Capital (previously Springbok Capital) had $7 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors also made a $6.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Frank Fu's CaaS Capital, Matthew L Pinz's Pinz Capital, and Benjamin A. Smith's Laurion Capital Management.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as W.P. Carey Inc. (NYSE:WPC) but similarly valued. We will take a look at Mohawk Industries, Inc. (NYSE:MHK), Elastic N.V. (NYSE:ESTC), Masimo Corporation (NASDAQ:MASI), CBOE Global Markets Inc (NASDAQ:CBOE), Lennox International Inc. (NYSE:LII), W.R. Berkley Corporation (NYSE:WRB), and Vedanta Ltd (NYSE:VEDL). This group of stocks' market values are closest to WPC's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MHK,44,1311640,8 ESTC,55,3062021,3 MASI,28,317268,-7 CBOE,31,826143,-2 LII,26,465734,1 WRB,36,648828,4 VEDL,10,63949,0 Average,32.9,956512,1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.9 hedge funds with bullish positions and the average amount invested in these stocks was $957 million. That figure was $147 million in WPC's case. Elastic N.V. (NYSE:ESTC) is the most popular stock in this table. On the other hand Vedanta Ltd (NYSE:VEDL) is the least popular one with only 10 bullish hedge fund positions. W.P. Carey Inc. (NYSE:WPC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WPC is 61.1. 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. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. A small number of hedge funds were also right about betting on WPC as the stock returned 4.7% since the end of the second quarter (through 10/15) and outperformed the market by an even larger margin.

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