Is Whitestone REIT (NYSE:WSR) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Whitestone REIT (NYSE:WSR) was in 6 hedge funds' portfolios at the end of December. WSR has experienced an increase in hedge fund interest lately. There were 3 hedge funds in our database with WSR holdings at the end of the previous quarter. Our calculations also showed that wsr isn't among the 30 most popular stocks among hedge funds.
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 32 percentage points since May 2014 through March 12, 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 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to analyze the fresh hedge fund action surrounding Whitestone REIT (NYSE:WSR).
How have hedgies been trading Whitestone REIT (NYSE:WSR)?
Heading into the first quarter of 2019, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards WSR over the last 14 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Whitestone REIT (NYSE:WSR), which was worth $12.6 million at the end of the fourth quarter. On the second spot was Marshall Wace LLP which amassed $1.9 million worth of shares. Moreover, Citadel Investment Group, Millennium Management, and Winton Capital Management were also bullish on Whitestone REIT (NYSE:WSR), allocating a large percentage of their portfolios to this stock.
Now, some big names have jumped into Whitestone REIT (NYSE:WSR) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the biggest position in Whitestone REIT (NYSE:WSR). Marshall Wace LLP had $1.9 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also initiated a $0.2 million position during the quarter. The other funds with brand new WSR positions are David Harding's Winton Capital Management and Benjamin A. Smith's Laurion Capital Management.
Let's also examine hedge fund activity in other stocks similar to Whitestone REIT (NYSE:WSR). We will take a look at Matrix Service Co (NASDAQ:MTRX), RISE Education Cayman Ltd (NASDAQ:REDU), Mobileiron Inc (NASDAQ:MOBL), and Peapack-Gladstone Financial Corp (NASDAQ:PGC). This group of stocks' market valuations are closest to WSR's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MTRX,19,46462,7 REDU,4,8795,-1 MOBL,16,93695,4 PGC,15,76314,0 Average,13.5,56317,2.5 [/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 $56 million. That figure was $16 million in WSR's case. Matrix Service Co (NASDAQ:MTRX) is the most popular stock in this table. On the other hand RISE Education Cayman Ltd (NASDAQ:REDU) is the least popular one with only 4 bullish hedge fund positions. Whitestone REIT (NYSE:WSR) 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 WSR wasn't nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); WSR investors were disappointed as the stock returned 1.1% 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.