The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 28. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is seat to reveal the smart money sentiment towards JBG SMITH Properties (NYSE:JBGS).
Hedge fund interest in JBG SMITH Properties (NYSE:JBGS) 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 JBGS to other stocks including Huazhu Group Limited (NASDAQ:HTHT), Toll Brothers Inc (NYSE:TOL), and Popular Inc (NASDAQ:BPOP) to get a better sense of its popularity.
If you'd ask most market participants, hedge funds are seen as slow, outdated financial tools of years past. While there are over 8000 funds trading at present, We choose to focus on the bigwigs of this club, about 750 funds. Most estimates calculate that this group of people preside over the lion's share of the hedge fund industry's total asset base, and by watching their best investments, Insider Monkey has revealed numerous investment strategies that have historically outstripped the broader indices. Insider Monkey's flagship hedge fund strategy outperformed the S&P 500 index by around 5 percentage points annually since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's go over the fresh hedge fund action regarding JBG SMITH Properties (NYSE:JBGS).
What have hedge funds been doing with JBG SMITH Properties (NYSE:JBGS)?
At the end of the second quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in JBGS over the last 16 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Zimmer Partners was the largest shareholder of JBG SMITH Properties (NYSE:JBGS), with a stake worth $64.4 million reported as of the end of March. Trailing Zimmer Partners was Third Avenue Management, which amassed a stake valued at $51.2 million. Sessa Capital, Ulysses Management, and Long Pond Capital were also very fond of the stock, giving the stock large weights in their portfolios.
Since JBG SMITH Properties (NYSE:JBGS) has faced declining sentiment from hedge fund managers, we can see that there were a few hedge funds that elected to cut their entire stakes by the end of the second quarter. It's worth mentioning that Ray Dalio's Bridgewater Associates dumped the largest stake of the "upper crust" of funds followed by Insider Monkey, comprising close to $0.9 million in stock. Cliff Asness's fund, AQR Capital Management, also cut its stock, about $0.6 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks similar to JBG SMITH Properties (NYSE:JBGS). These stocks are Huazhu Group Limited (NASDAQ:HTHT), Toll Brothers Inc (NYSE:TOL), Popular Inc (NASDAQ:BPOP), and Syneos Health, Inc. (NASDAQ:SYNH). This group of stocks' market values are similar to JBGS's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HTHT,14,164741,0 TOL,20,368947,-8 BPOP,30,740514,-3 SYNH,20,256102,-6 Average,21,382576,-4.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $383 million. That figure was $291 million in JBGS's case. Popular Inc (NASDAQ:BPOP) is the most popular stock in this table. On the other hand Huazhu Group Limited (NASDAQ:HTHT) is the least popular one with only 14 bullish hedge fund positions. JBG SMITH Properties (NYSE:JBGS) 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately JBGS wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); JBGS investors were disappointed as the stock returned 0.3% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks (view the video below) among hedge funds as many of these stocks already outperformed the market so far in 2019. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.