We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of December 31st. In this article we look at what those investors think of Macerich Company (NYSE:MAC).
Macerich Company (NYSE:MAC) has seen a decrease in enthusiasm from smart money lately. MAC was in 25 hedge funds' portfolios at the end of December. There were 30 hedge funds in our database with MAC holdings at the end of the previous quarter. Our calculations also showed that MAC isn't among the 30 most popular stocks among hedge funds.
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 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 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.
Let's take a gander at the latest hedge fund action surrounding The Macerich Company (NYSE:MAC).
Hedge fund activity in Macerich Company (NYSE:MAC)
Heading into the first quarter of 2019, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MAC over the last 14 quarters. With the smart money's sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
Among these funds, Ulysses Management held the most valuable stake in Macerich Company (NYSE:MAC), which was worth $105.9 million at the end of the third quarter. On the second spot was Third Avenue Management which amassed $66 million worth of shares. Moreover, Balyasny Asset Management, Alta Fundamental Advisers, and Elliott Management were also bullish on Macerich Company (NYSE:MAC), allocating a large percentage of their portfolios to this stock.
Judging by the fact that Macerich Company (NYSE:MAC) has faced falling interest from hedge fund managers, we can see that there exists a select few hedge funds who sold off their positions entirely in the third quarter. At the top of the heap, Joshua Nash's Ulysses Management said goodbye to the largest investment of the "upper crust" of funds monitored by Insider Monkey, comprising an estimated $32.5 million in stock. John Khoury's fund, Long Pond Capital, also dumped its stock, about $20.7 million worth. These moves are important to note, as total hedge fund interest fell by 5 funds in the third quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Macerich Company (NYSE:MAC) but similarly valued. These stocks are Encompass Health Corporation (NYSE:EHC), Aqua America Inc (NYSE:WTR), Western Gas Equity Partners LP (NYSE:WGP), and IPG Photonics Corporation (NASDAQ:IPGP). This group of stocks' market caps resemble MAC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EHC,30,418019,5 WTR,19,172522,6 WGP,7,66283,2 IPGP,16,131444,0 Average,18,197067,3.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $197 million. That figure was $251 million in MAC's case. Encompass Health Corporation (NYSE:EHC) is the most popular stock in this table. On the other hand Western Gas Equity Partners LP (NYSE:WGP) is the least popular one with only 7 bullish hedge fund positions. Macerich Company (NYSE:MAC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks among hedge funds returned 21.3% through April 8th and outperformed the S&P 500 ETF (SPY) by more than 5 percentage points. Unfortunately MAC wasn't in this group. Hedge funds that bet on MAC were disappointed as the stock returned 2.5% and underperformed the market. If you are interested in investing in large cap stocks, you should check out the top 15 hedge fund stocks as 12 of these outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.