Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' recent losses in Facebook. Let’s take a closer look at what the funds we track think about Urban Edge Properties (NYSE:UE) in this article.
Hedge fund interest in Urban Edge Properties (NYSE:UE) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare UE to other stocks including Tanger Factory Outlet Centers Inc. (NYSE:SKT), American Assets Trust, Inc (NYSE:AAT), and Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) to get a better sense of its popularity.
If you'd ask most market participants, hedge funds are seen as slow, old investment tools of yesteryear. While there are greater than 8000 funds in operation at the moment, Our researchers choose to focus on the top tier of this group, approximately 750 funds. These hedge fund managers handle the lion's share of all hedge funds' total asset base, and by keeping track of their unrivaled picks, Insider Monkey has figured out a few investment strategies that have historically defeated the S&P 500 index. Insider Monkey's flagship hedge fund strategy outrun the S&P 500 index by nearly 5 percentage points per year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
We're going to analyze the new hedge fund action surrounding Urban Edge Properties (NYSE:UE).
What does the smart money think about Urban Edge Properties (NYSE:UE)?
At the end of the fourth quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the second quarter of 2018. On the other hand, there were a total of 10 hedge funds with a bullish position in UE a year ago. With the smart money's sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Balyasny Asset Management, managed by Dmitry Balyasny, holds the largest position in Urban Edge Properties (NYSE:UE). Balyasny Asset Management has a $17.5 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $14.3 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that hold long positions encompass D. E. Shaw's D E Shaw, Israel Englander's Millennium Management and Ken Griffin's Citadel Investment Group.
Seeing as Urban Edge Properties (NYSE:UE) has experienced a decline in interest from hedge fund managers, we can see that there was a specific group of hedge funds who were dropping their entire stakes in the third quarter. Intriguingly, Paul Tudor Jones's Tudor Investment Corp said goodbye to the largest investment of all the hedgies monitored by Insider Monkey, totaling an estimated $1.3 million in stock, and Jeffrey Furber's AEW Capital Management was right behind this move, as the fund dumped about $0.9 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Urban Edge Properties (NYSE:UE) but similarly valued. We will take a look at Tanger Factory Outlet Centers Inc. (NYSE:SKT), American Assets Trust, Inc (NYSE:AAT), Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), and QTS Realty Trust Inc (NYSE:QTS). This group of stocks' market valuations are similar to UE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SKT,14,77195,3 AAT,14,102948,3 CCO,13,70697,0 QTS,16,316250,-3 Average,14.25,141773,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $142 million. That figure was $75 million in UE's case. QTS Realty Trust Inc (NYSE:QTS) is the most popular stock in this table. On the other hand Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Urban Edge Properties (NYSE:UE) is even less popular than CCO. Hedge funds dodged a bullet by taking a bearish stance towards UE. Our calculations showed that the top 15 most popular hedge fund stocks returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately UE wasn't nearly as popular as these 15 stock (hedge fund sentiment was very bearish); UE investors were disappointed as the stock returned 11.4% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.