At Insider Monkey we follow nearly 750 of the best-performing investors and even though many of them lost money in the last couple of months of 2018 (some actually delivered very strong returns), the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.
Washington Prime Group Inc. (NYSE:WPG) was in 13 hedge funds' portfolios at the end of the fourth quarter of 2018. WPG investors should be aware of an increase in hedge fund interest in recent months. There were 10 hedge funds in our database with WPG holdings at the end of the previous quarter. Our calculations also showed that wpg 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.
We're going to analyze the key hedge fund action regarding Washington Prime Group Inc. (NYSE:WPG).
Hedge fund activity in Washington Prime Group Inc. (NYSE:WPG)
Heading into the first quarter of 2019, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 30% from the previous quarter. The graph below displays the number of hedge funds with bullish position in WPG over the last 14 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, John Overdeck and David Siegel's Two Sigma Advisors has the largest position in Washington Prime Group Inc. (NYSE:WPG), worth close to $3.5 million, amounting to less than 0.1%% of its total 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which holds a $1.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that hold long positions contain Ken Griffin's Citadel Investment Group, Mike Vranos's Ellington and Ray Dalio's Bridgewater Associates.
As industrywide interest jumped, some big names have jumped into Washington Prime Group Inc. (NYSE:WPG) headfirst. Citadel Investment Group, managed by Ken Griffin, created the most valuable position in Washington Prime Group Inc. (NYSE:WPG). Citadel Investment Group had $1.3 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital also initiated a $0.4 million position during the quarter. The other funds with brand new WPG positions are Joe DiMenna's ZWEIG DIMENNA PARTNERS and David Costen Haley's HBK Investments.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Washington Prime Group Inc. (NYSE:WPG) but similarly valued. These stocks are Varex Imaging Corporation (NASDAQ:VREX), Emerald Expositions Events, Inc. (NYSE:EEX), Codexis, Inc. (NASDAQ:CDXS), and Trueblue Inc (NYSE:TBI). This group of stocks' market valuations resemble WPG's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VREX,15,86005,1 EEX,11,8913,1 CDXS,13,276255,1 TBI,15,61257,1 Average,13.5,108108,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $108 million. That figure was $9 million in WPG's case. Varex Imaging Corporation (NASDAQ:VREX) is the most popular stock in this table. On the other hand Emerald Expositions Events, Inc. (NYSE:EEX) is the least popular one with only 11 bullish hedge fund positions. Washington Prime Group Inc. (NYSE:WPG) 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately WPG wasn't nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); WPG investors were disappointed as the stock returned 0% 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.