Is Sun Communities Inc (NYSE:SUI) 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.
Is Sun Communities Inc (NYSE:SUI) a good investment today? The smart money is becoming more confident. The number of long hedge fund bets inched up by 3 lately. Our calculations also showed that SUI 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 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 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.
Let's take a look at the recent hedge fund action encompassing Sun Communities Inc (NYSE:SUI).
Hedge fund activity in Sun Communities Inc (NYSE:SUI)
At Q3's end, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SUI over the last 13 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
The largest stake in Sun Communities Inc (NYSE:SUI) was held by Renaissance Technologies, which reported holding $132 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $71 million position. Other investors bullish on the company included Balyasny Asset Management, Zimmer Partners, and Echo Street Capital Management.
As industrywide interest jumped, key money managers were breaking ground themselves. Zimmer Partners, managed by Stuart J. Zimmer, initiated the largest position in Sun Communities Inc (NYSE:SUI). Zimmer Partners had $58.4 million invested in the company at the end of the quarter. Benjamin A. Smith's Laurion Capital Management also made a $12.9 million investment in the stock during the quarter. The other funds with new positions in the stock are George Zweig, Shane Haas and Ravi Chander's Signition LP, Ken Griffin's Citadel Investment Group, and Matthew Hulsizer's PEAK6 Capital Management.
Let's go over hedge fund activity in other stocks similar to Sun Communities Inc (NYSE:SUI). We will take a look at East West Bancorp, Inc. (NASDAQ:EWBC), PagSeguro Digital Ltd. (NYSE:PAGS), Camden Property Trust (NYSE:CPT), and RPM International Inc. (NYSE:RPM). This group of stocks' market values resemble SUI's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EWBC,29,443982,5 PAGS,39,1581761,-9 CPT,14,281370,-1 RPM,28,491022,7 Average,27.5,699534,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.5 hedge funds with bullish positions and the average amount invested in these stocks was $700 million. That figure was $557 million in SUI's case. PagSeguro Digital Ltd. (NYSE:PAGS) is the most popular stock in this table. On the other hand Camden Property Trust (NYSE:CPT) is the least popular one with only 14 bullish hedge fund positions. Sun Communities Inc (NYSE:SUI) 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. In this regard PAGS might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.