At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Tiger Global because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
SITE Centers Corp. (NYSE:SITC) has seen a decrease in hedge fund interest recently. SITC was in 14 hedge funds' portfolios at the end of the first quarter of 2019. There were 15 hedge funds in our database with SITC holdings at the end of the previous quarter. Our calculations also showed that SITC isn't among the 30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's take a glance at the key hedge fund action encompassing SITE Centers Corp. (NYSE:SITC).
Hedge fund activity in SITE Centers Corp. (NYSE:SITC)
Heading into the second quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in SITC over the last 15 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Capital Growth Management was the largest shareholder of SITE Centers Corp. (NYSE:SITC), with a stake worth $42.8 million reported as of the end of March. Trailing Capital Growth Management was Citadel Investment Group, which amassed a stake valued at $6.6 million. Balyasny Asset Management, Millennium Management, and Two Sigma Advisors were also very fond of the stock, giving the stock large weights in their portfolios.
Since SITE Centers Corp. (NYSE:SITC) has witnessed falling interest from hedge fund managers, logic holds that there is a sect of hedge funds that slashed their positions entirely by the end of the third quarter. Interestingly, Ray Dalio's Bridgewater Associates dropped the largest stake of the "upper crust" of funds followed by Insider Monkey, comprising close to $0.4 million in stock. D. E. Shaw's fund, D E Shaw, also dropped its stock, about $0.4 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 1 funds by the end of the third quarter.
Let's go over hedge fund activity in other stocks similar to SITE Centers Corp. (NYSE:SITC). These stocks are National Vision Holdings, Inc. (NASDAQ:EYE), RPC, Inc. (NYSE:RES), Liberty Expedia Holdings, Inc. (NASDAQ:LEXEA), and Integer Holdings Corporation (NYSE:ITGR). This group of stocks' market values match SITC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EYE,16,395351,1 RES,20,138878,8 LEXEA,29,390781,3 ITGR,29,241568,10 Average,23.5,291645,5.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.5 hedge funds with bullish positions and the average amount invested in these stocks was $292 million. That figure was $65 million in SITC's case. Liberty Expedia Holdings, Inc. (NASDAQ:LEXEA) is the most popular stock in this table. On the other hand National Vision Holdings, Inc. (NASDAQ:EYE) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks SITE Centers Corp. (NYSE:SITC) is even less popular than EYE. Hedge funds dodged a bullet by taking a bearish stance towards SITC. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately SITC wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); SITC investors were disappointed as the stock returned 0.9% during the same time frame 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 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published at Insider Monkey.
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