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 March. At Insider Monkey, we follow nearly 750 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 Store Capital Corporation (NYSE:STOR), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Store Capital Corporation (NYSE:STOR) a healthy stock for your portfolio? Prominent investors are in a pessimistic mood. The number of long hedge fund positions were trimmed by 2 in recent months. Our calculations also showed that STOR isn't among the 30 most popular stocks among hedge funds. STOR was in 22 hedge funds' portfolios at the end of March. There were 24 hedge funds in our database with STOR positions at the end of the previous quarter.
Why do we pay any attention at all to hedge fund sentiment? 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 review the new hedge fund action regarding Store Capital Corporation (NYSE:STOR).
How are hedge funds trading Store Capital Corporation (NYSE:STOR)?
Heading into the second quarter of 2019, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards STOR over the last 15 quarters. With hedge funds' capital changing hands, there exists a few noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Berkshire Hathaway, managed by Warren Buffett, holds the most valuable position in Store Capital Corporation (NYSE:STOR). Berkshire Hathaway has a $623.8 million position in the stock, comprising 0.3% of its 13F portfolio. The second most bullish fund manager is Jeffrey Furber of AEW Capital Management, with a $73.7 million position; 2.1% of its 13F portfolio is allocated to the stock. Some other members of the smart money with similar optimism contain Ken Griffin's Citadel Investment Group, Israel Englander's Millennium Management and Jim Simons's Renaissance Technologies.
Because Store Capital Corporation (NYSE:STOR) has witnessed falling interest from hedge fund managers, it's safe to say that there exists a select few fund managers that slashed their entire stakes last quarter. Interestingly, Paul Marshall and Ian Wace's Marshall Wace LLP dropped the biggest position of all the hedgies tracked by Insider Monkey, totaling about $4.5 million in stock, and Dmitry Balyasny's Balyasny Asset Management was right behind this move, as the fund cut about $0.8 million worth. These moves are important to note, as total hedge fund interest dropped by 2 funds last quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Store Capital Corporation (NYSE:STOR) but similarly valued. We will take a look at Santander Consumer USA Holdings Inc (NYSE:SC), HD Supply Holdings Inc (NASDAQ:HDS), Euronet Worldwide, Inc. (NASDAQ:EEFT), and Sensata Technologies Holding plc (NYSE:ST). This group of stocks' market valuations are closest to STOR's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SC,22,748622,1 HDS,30,939166,-1 EEFT,33,376566,2 ST,21,1123073,-2 Average,26.5,796857,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.5 hedge funds with bullish positions and the average amount invested in these stocks was $797 million. That figure was $1022 million in STOR's case. Euronet Worldwide, Inc. (NASDAQ:EEFT) is the most popular stock in this table. On the other hand Sensata Technologies Holding plc (NYSE:ST) is the least popular one with only 21 bullish hedge fund positions. Store Capital Corporation (NYSE:STOR) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. A small number of hedge funds were also right about betting on STOR, though not to the same extent, as the stock returned 0.4% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.