Coronavirus is probably the #1 concern in investors' minds right now. It should be. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW. We predicted that a US recession is imminent and US stocks will go down by at least 20% in the next 3-6 months. We also told you to short the market ETFs and buy long-term bonds. Investors who agreed with us and replicated these trades are up double digits whereas the market is down double digits. Our article also called for a total international travel ban to prevent the spread of the coronavirus especially from Europe. We were one step ahead of the markets and the president (read our latest 10 coronavirus predictions).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. After several tireless days we have finished crunching the numbers from nearly 835 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of December 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards 0.
Is Healthpeak Properties a buy here? Investors who are in the know are reducing their bets on the stock. The number of bullish hedge fund positions retreated by 3 in recent months. Our calculations also showed that PEAK isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video below for Q3 rankings). PEAK was in 26 hedge funds' portfolios at the end of the fourth quarter of 2019. There were 29 hedge funds in our database with PEAK positions at the end of the previous quarter.
[caption id="attachment_26044" align="aligncenter" width="350"] Ken Griffin of Citadel Investment Group[/caption]
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. 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 let's view the key hedge fund action regarding 0.
What does smart money think about Healthpeak Properties, Inc. (NYSE:PEAK)?
Heading into the first quarter of 2020, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from the third quarter of 2019. On the other hand, there were a total of 28 hedge funds with a bullish position in PEAK a year ago. With hedgies' capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
The largest stake in Healthpeak Properties, Inc. (NYSE:PEAK) was held by Zimmer Partners, which reported holding $148.2 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $139.8 million position. Other investors bullish on the company included Long Pond Capital, Land & Buildings Investment Management, and Echo Street Capital Management. In terms of the portfolio weights assigned to each position Land & Buildings Investment Management allocated the biggest weight to Healthpeak Properties, Inc. (NYSE:PEAK), around 5.13% of its 13F portfolio. Waterfront Capital Partners is also relatively very bullish on the stock, setting aside 2.76 percent of its 13F equity portfolio to PEAK.
Seeing as Healthpeak Properties, Inc. (NYSE:PEAK) has experienced declining sentiment from hedge fund managers, logic holds that there was a specific group of hedge funds who sold off their positions entirely last quarter. At the top of the heap, Clint Carlson's Carlson Capital dropped the biggest investment of the "upper crust" of funds watched by Insider Monkey, valued at an estimated $48.3 million in stock. Matthew Crandall Gilman's fund, Hill Winds Capital, also sold off its stock, about $4.8 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 3 funds last quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Healthpeak Properties, Inc. (NYSE:PEAK) but similarly valued. These stocks are Credicorp Ltd. (NYSE:BAP), Equifax Inc. (NYSE:EFX), Check Point Software Technologies Ltd. (NASDAQ:CHKP), and Magna International Inc. (NYSE:MGA). This group of stocks' market caps are similar to PEAK's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BAP,22,612424,-6 EFX,32,1615426,4 CHKP,30,626708,6 MGA,23,688858,4 Average,26.75,885854,2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.75 hedge funds with bullish positions and the average amount invested in these stocks was $886 million. That figure was $525 million in PEAK's case. Equifax Inc. (NYSE:EFX) is the most popular stock in this table. On the other hand Credicorp Ltd. (NYSE:BAP) is the least popular one with only 22 bullish hedge fund positions. Healthpeak Properties, Inc. (NYSE:PEAK) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 22.3% in 2020 through March 16th but beat the market by 3.2 percentage points. Unfortunately PEAK wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); PEAK investors were disappointed as the stock returned -34.7% 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 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.