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Billionaire hedge fund managers such as David Abrams, Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the nearly unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Regency Centers Corp (NASDAQ:REG) was in 12 hedge funds' portfolios at the end of June. REG investors should pay attention to a decrease in hedge fund sentiment lately. There were 17 hedge funds in our database with REG positions at the end of the previous quarter. Our calculations also showed that REG isn't among the 30 most popular stocks among hedge funds (view the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to go over the key hedge fund action regarding Regency Centers Corp (NASDAQ:REG).
Hedge fund activity in Regency Centers Corp (NASDAQ:REG)
Heading into the third quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of -29% from one quarter earlier. On the other hand, there were a total of 22 hedge funds with a bullish position in REG a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
The largest stake in Regency Centers Corp (NASDAQ:REG) was held by Renaissance Technologies, which reported holding $134.5 million worth of stock at the end of March. It was followed by D E Shaw with a $60.4 million position. Other investors bullish on the company included Citadel Investment Group, Capital Growth Management, and Adage Capital Management.
Seeing as Regency Centers Corp (NASDAQ:REG) has witnessed falling interest from the entirety of the hedge funds we track, it's safe to say that there exists a select few funds who were dropping their full holdings heading into Q3. At the top of the heap, Greg Poole's Echo Street Capital Management sold off the biggest position of the 750 funds followed by Insider Monkey, worth an estimated $27.6 million in stock. Eduardo Abush's fund, Waterfront Capital Partners, also dumped its stock, about $8.3 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 5 funds heading into Q3.
Let's now review hedge fund activity in other stocks similar to Regency Centers Corp (NASDAQ:REG). We will take a look at Open Text Corporation (NASDAQ:OTEX), SVB Financial Group (NASDAQ:SIVB), Burlington Stores Inc (NYSE:BURL), and Domino's Pizza, Inc. (NYSE:DPZ). All of these stocks' market caps resemble REG's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OTEX,16,778997,-6 SIVB,26,484420,-3 BURL,31,1536898,0 DPZ,27,1763092,-5 Average,25,1140852,-3.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $1141 million. That figure was $320 million in REG's case. Burlington Stores Inc (NYSE:BURL) is the most popular stock in this table. On the other hand Open Text Corporation (NASDAQ:OTEX) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Regency Centers Corp (NASDAQ:REG) is even less popular than OTEX. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on REG, though not to the same extent, as the stock returned 5.1% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
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