We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 835 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Weingarten Realty Investors (NYSE:WRI), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Weingarten Realty Investors (NYSE:WRI) a bargain? The smart money is in a bearish mood. The number of long hedge fund positions retreated by 1 lately. Our calculations also showed that WRI isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
According to most investors, hedge funds are viewed as worthless, outdated investment vehicles of the past. While there are greater than 8000 funds trading at present, Our experts hone in on the leaders of this club, about 850 funds. Most estimates calculate that this group of people oversee most of all hedge funds' total capital, and by tailing their unrivaled picks, Insider Monkey has identified various investment strategies that have historically outperformed Mr. Market. Insider Monkey's flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 35.3% since February 2017 (through March 3rd) even though the market was up more than 35% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_25717" align="aligncenter" width="400"] Steven Cohen of Point72 Asset Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic's significance before most investors. Keeping this in mind we're going to analyze the recent hedge fund action regarding Weingarten Realty Investors (NYSE:WRI).
What have hedge funds been doing with Weingarten Realty Investors (NYSE:WRI)?
Heading into the first quarter of 2020, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the previous quarter. On the other hand, there were a total of 12 hedge funds with a bullish position in WRI a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Weingarten Realty Investors (NYSE:WRI), with a stake worth $44.4 million reported as of the end of September. Trailing Renaissance Technologies was Millennium Management, which amassed a stake valued at $37.9 million. Two Sigma Advisors, Waterfront Capital Partners, and Winton Capital Management 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 Waterfront Capital Partners allocated the biggest weight to Weingarten Realty Investors (NYSE:WRI), around 2.75% of its 13F portfolio. Weld Capital Management is also relatively very bullish on the stock, designating 0.62 percent of its 13F equity portfolio to WRI.
Due to the fact that Weingarten Realty Investors (NYSE:WRI) has witnessed declining sentiment from hedge fund managers, it's safe to say that there is a sect of hedge funds who sold off their positions entirely last quarter. Intriguingly, Clint Carlson's Carlson Capital said goodbye to the biggest stake of the 750 funds watched by Insider Monkey, valued at an estimated $29.3 million in stock, and Dmitry Balyasny's Balyasny Asset Management was right behind this move, as the fund said goodbye to about $14.6 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 1 funds last quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Weingarten Realty Investors (NYSE:WRI) but similarly valued. We will take a look at Coherent, Inc. (NASDAQ:COHR), National Fuel Gas Company (NYSE:NFG), frontdoor, inc. (NASDAQ:FTDR), and Five9 Inc (NASDAQ:FIVN). This group of stocks' market values are similar to WRI's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position COHR,28,325243,9 NFG,26,179051,2 FTDR,37,681826,-2 FIVN,35,632108,2 Average,31.5,454557,2.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.5 hedge funds with bullish positions and the average amount invested in these stocks was $455 million. That figure was $176 million in WRI's case. frontdoor, inc. (NASDAQ:FTDR) is the most popular stock in this table. On the other hand National Fuel Gas Company (NYSE:NFG) is the least popular one with only 26 bullish hedge fund positions. Compared to these stocks Weingarten Realty Investors (NYSE:WRI) is even less popular than NFG. Hedge funds dodged a bullet by taking a bearish stance towards WRI. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but managed to beat the market by 5.5 percentage points. Unfortunately WRI wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); WRI investors were disappointed as the stock returned -49.4% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in Q1. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.