Is IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Hedge fund interest in IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Sierra Bancorp (NASDAQ:BSRR), Purple Innovation, Inc. (NASDAQ:PRPL), and Gladstone Investment Corporation (NASDAQ:GAIN) to gather more data points. Our calculations also showed that IRCP isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_373490" align="aligncenter" width="640"] Wall Street Bull[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius' weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager's investor letter and the stock already gained 20 percent. Now we're going to check out the new hedge fund action surrounding IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP).
What have hedge funds been doing with IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP)?
At Q3's end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 3 hedge funds with a bullish position in IRCP a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Richard Mashaal's Rima Senvest Management has the biggest position in IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP), worth close to $7.3 million, comprising 0.6% of its total 13F portfolio. Sitting at the No. 2 spot is Autonomy Capital, led by Robert Charles Gibbins, holding a $3.1 million position; 1.8% of its 13F portfolio is allocated to the stock. Other peers with similar optimism encompass Ari Zweiman's 683 Capital Partners, Don Morgan's Brigade Capital and . In terms of the portfolio weights assigned to each position Autonomy Capital allocated the biggest weight to IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP), around 1.8% of its 13F portfolio. Rima Senvest Management is also relatively very bullish on the stock, earmarking 0.63 percent of its 13F equity portfolio to IRCP.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the third quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's now review hedge fund activity in other stocks similar to IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP). We will take a look at Sierra Bancorp (NASDAQ:BSRR), Purple Innovation, Inc. (NASDAQ:PRPL), Gladstone Investment Corporation (NASDAQ:GAIN), and Meridian Bioscience, Inc. (NASDAQ:VIVO). All of these stocks' market caps are similar to IRCP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BSRR,10,14970,3 PRPL,5,48660,2 GAIN,2,1970,-2 VIVO,16,53017,-1 Average,8.25,29654,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $30 million. That figure was $13 million in IRCP's case. Meridian Bioscience, Inc. (NASDAQ:VIVO) is the most popular stock in this table. On the other hand Gladstone Investment Corporation (NASDAQ:GAIN) is the least popular one with only 2 bullish hedge fund positions. IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP) 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on IRCP as the stock returned 11.2% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.