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Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the third quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Hudson Pacific Properties Inc (NYSE:HPP) based on that data.
Is HPP a good stock to buy now? Prominent investors were reducing their bets on the stock. The number of bullish hedge fund positions retreated by 7 recently. Hudson Pacific Properties Inc (NYSE:HPP) was in 17 hedge funds' portfolios at the end of September. The all time high for this statistic is 27. Our calculations also showed that HPP isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are a lot of tools investors put to use to grade their holdings. A pair of the less utilized tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outperform the S&P 500 by a healthy amount (see the details here).
David Harding of Winton Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we're going to take a glance at the key hedge fund action surrounding Hudson Pacific Properties Inc (NYSE:HPP).
Do Hedge Funds Think HPP Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -29% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards HPP over the last 21 quarters. With the smart money's capital changing hands, there exists a select group of notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
Among these funds, D1 Capital Partners held the most valuable stake in Hudson Pacific Properties Inc (NYSE:HPP), which was worth $198.2 million at the end of the third quarter. On the second spot was Long Pond Capital which amassed $64.6 million worth of shares. Angelo Gordon & Co, EMS Capital, and Renaissance Technologies were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Long Pond Capital allocated the biggest weight to Hudson Pacific Properties Inc (NYSE:HPP), around 2.48% of its 13F portfolio. Angelo Gordon & Co is also relatively very bullish on the stock, designating 1.7 percent of its 13F equity portfolio to HPP.
Seeing as Hudson Pacific Properties Inc (NYSE:HPP) has experienced bearish sentiment from hedge fund managers, it's safe to say that there were a few fund managers that elected to cut their entire stakes in the third quarter. At the top of the heap, Andrew Kurita's Kettle Hill Capital Management dumped the biggest investment of the 750 funds monitored by Insider Monkey, comprising an estimated $8.6 million in stock. David Harding's fund, Winton Capital Management, also dumped its stock, about $2.7 million worth. These moves are important to note, as aggregate hedge fund interest fell by 7 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks similar to Hudson Pacific Properties Inc (NYSE:HPP). These stocks are Black Hills Corporation (NYSE:BKH), Inari Medical, Inc. (NASDAQ:NARI), Air Lease Corp (NYSE:AL), Vicor Corp (NASDAQ:VICR), ASGN Incorporated (NYSE:ASGN), Western Midstream Partners, LP (NYSE:WES), and frontdoor, inc. (NASDAQ:FTDR). All of these stocks' market caps are closest to HPP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BKH,22,128780,0 NARI,14,105958,-5 AL,20,608764,-2 VICR,20,75016,1 ASGN,21,73967,8 WES,10,65743,-1 FTDR,38,694601,-3 Average,20.7,250404,-0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.7 hedge funds with bullish positions and the average amount invested in these stocks was $250 million. That figure was $312 million in HPP's case. frontdoor, inc. (NASDAQ:FTDR) is the most popular stock in this table. On the other hand Western Midstream Partners, LP (NYSE:WES) is the least popular one with only 10 bullish hedge fund positions. Hudson Pacific Properties Inc (NYSE:HPP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HPP is 29.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on HPP as the stock returned 14.1% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.