After several tireless days we have finished crunching the numbers from nearly 750 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 June 28. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Simon Property Group, Inc (NYSE:SPG).
Simon Property Group, Inc (NYSE:SPG) investors should be aware of a decrease in support from the world's most elite money managers in recent months. Our calculations also showed that SPG isn't among the 30 most popular stocks among hedge funds (see the video below) Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 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.
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's take a glance at the latest hedge fund action regarding Simon Property Group, Inc (NYSE:SPG).
Hedge fund activity in Simon Property Group, Inc (NYSE:SPG)
At the end of the second quarter, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from the first quarter of 2019. By comparison, 20 hedge funds held shares or bullish call options in SPG a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, AEW Capital Management, managed by Jeffrey Furber, holds the largest position in Simon Property Group, Inc (NYSE:SPG). AEW Capital Management has a $233.3 million position in the stock, comprising 7.1% of its 13F portfolio. The second most bullish fund manager is D. E. Shaw of D E Shaw, with a $124.3 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism comprise Cliff Asness's AQR Capital Management, Renaissance Technologies and Noam Gottesman's GLG Partners.
Because Simon Property Group, Inc (NYSE:SPG) has witnessed bearish sentiment from the aggregate hedge fund industry, logic holds that there is a sect of hedge funds that slashed their full holdings in the second quarter. Intriguingly, D. E. Shaw's D E Shaw dropped the largest position of the "upper crust" of funds watched by Insider Monkey, totaling about $14.7 million in stock. Paul Marshall and Ian Wace's fund, Marshall Wace LLP, also dumped its stock, about $4.4 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds in the second quarter.
Let's go over hedge fund activity in other stocks similar to Simon Property Group, Inc (NYSE:SPG). We will take a look at Walgreens Boots Alliance Inc (NASDAQ:WBA), Intercontinental Exchange Inc (NYSE:ICE), Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG), and Waste Management, Inc. (NYSE:WM). This group of stocks' market valuations resemble SPG's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WBA,41,782849,8 ICE,35,1926137,0 SMFG,14,477204,4 WM,35,3415842,2 Average,31.25,1650508,3.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.25 hedge funds with bullish positions and the average amount invested in these stocks was $1651 million. That figure was $909 million in SPG's case. Walgreens Boots Alliance Inc (NASDAQ:WBA) is the most popular stock in this table. On the other hand Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG) is the least popular one with only 14 bullish hedge fund positions. Simon Property Group, Inc (NYSE:SPG) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately SPG wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SPG investors were disappointed as the stock returned -1.2% during the third quarter 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 many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.