- Oops!Something went wrong.Please try again later.
- Oops!Something went wrong.Please try again later.
In this article we will check out the progression of hedge fund sentiment towards SL Green Realty Corp (NYSE:SLG) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is SL Green Realty Corp (NYSE:SLG) a healthy stock for your portfolio? Investors who are in the know were becoming less hopeful. The number of bullish hedge fund bets were cut by 1 recently. SL Green Realty Corp (NYSE:SLG) was in 21 hedge funds' portfolios at the end of March. The all time high for this statistic is 29. Our calculations also showed that SLG isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
According to most stock holders, hedge funds are perceived as slow, outdated financial tools of years past. While there are over 8000 funds trading at the moment, We look at the crème de la crème of this group, approximately 850 funds. Most estimates calculate that this group of people handle the lion's share of all hedge funds' total asset base, and by keeping an eye on their unrivaled equity investments, Insider Monkey has brought to light many investment strategies that have historically surpassed the market. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Ken Griffin of Citadel Investment Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. With all of this in mind we're going to take a look at the new hedge fund action encompassing SL Green Realty Corp (NYSE: SLG).
Do Hedge Funds Think SLG Is A Good Stock To Buy Now?
At first quarter's end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SLG over the last 23 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, LDR Capital was the largest shareholder of SL Green Realty Corp (NYSE:SLG), with a stake worth $40.9 million reported as of the end of March. Trailing LDR Capital was Hosking Partners, which amassed a stake valued at $25.9 million. Citadel Investment Group, Arrowstreet Capital, and Citadel Investment Group 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 LDR Capital allocated the biggest weight to SL Green Realty Corp (NYSE:SLG), around 30.98% of its 13F portfolio. Mountaineer Partners Management is also relatively very bullish on the stock, dishing out 7.05 percent of its 13F equity portfolio to SLG.
Since SL Green Realty Corp (NYSE:SLG) has experienced a decline in interest from the entirety of the hedge funds we track, it's easy to see that there was a specific group of hedge funds who sold off their positions entirely heading into Q2. Intriguingly, Frank Brosens's Taconic Capital cut the biggest position of the 750 funds monitored by Insider Monkey, valued at close to $41.1 million in stock. Jonathan Kolatch's fund, Redwood Capital Management, also cut its stock, about $20.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds heading into Q2.
Let's now review hedge fund activity in other stocks similar to SL Green Realty Corp (NYSE:SLG). We will take a look at Science Applications International Corp (NYSE:SAIC), Curtiss-Wright Corp. (NYSE:CW), Nomad Foods Limited (NYSE:NOMD), Lancaster Colony Corporation (NASDAQ:LANC), Nevro Corp (NYSE:NVRO), Xerox Holdings Corporation (NYSE:XRX), and SelectQuote, Inc. (NYSE:SLQT). This group of stocks' market valuations are similar to SLG's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SAIC,18,207548,-10 CW,22,208527,-1 NOMD,25,324331,-3 LANC,22,246061,3 NVRO,29,649613,-1 XRX,30,1044775,3 SLQT,17,185055,-2 Average,23.3,409416,-1.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.3 hedge funds with bullish positions and the average amount invested in these stocks was $409 million. That figure was $162 million in SLG's case. Xerox Holdings Corporation (NYSE:XRX) is the most popular stock in this table. On the other hand SelectQuote, Inc. (NYSE:SLQT) is the least popular one with only 17 bullish hedge fund positions. SL Green Realty Corp (NYSE:SLG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SLG is 41.1. 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 23.8% in 2021 through July 16th and beat the market by 7.7 percentage points. A small number of hedge funds were also right about betting on SLG, though not to the same extent, as the stock returned 10% since the end of Q1 (through July 16th) and outperformed the market.
Get real-time email alerts: Follow Sl Green Realty Corp (NYSE:SLG)
Disclosure: None. This article was originally published at Insider Monkey.