Washington Prime Group Inc. (WPG): Are Hedge Funds Right About This Stock?
We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Washington Prime Group Inc. (NYSE:WPG) based on that data.
Washington Prime Group Inc. (NYSE:WPG) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 9 hedge funds' portfolios at the end of the first quarter of 2020. 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 Willis Lease Finance Corporation (NASDAQ:WLFC), Codorus Valley Bancorp, Inc. (NASDAQ:CVLY), and Auburn National Bancorporation, Inc. (NASDAQ:AUBN) to gather more data points. Our calculations also showed that WPG isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
To the average investor there are a multitude of signals stock traders have at their disposal to size up their stock investments. A couple of the most under-the-radar signals are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the top fund managers can trounce the S&P 500 by a very impressive amount (see the details here).
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Israel Englander of Millennium Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we're going to view the recent hedge fund action encompassing Washington Prime Group Inc. (NYSE:WPG).
What have hedge funds been doing with Washington Prime Group Inc. (NYSE:WPG)?
At the end of the first quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards WPG over the last 18 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the most valuable position in Washington Prime Group Inc. (NYSE:WPG). Arrowstreet Capital has a $0.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Marshall Wace LLP, managed by Paul Marshall and Ian Wace, which holds a $0.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that hold long positions comprise Ken Griffin's Citadel Investment Group, D. E. Shaw's D E Shaw and David Costen Haley's HBK Investments. In terms of the portfolio weights assigned to each position Tudor Investment Corp allocated the biggest weight to Washington Prime Group Inc. (NYSE:WPG), around 0.01% of its 13F portfolio. Marshall Wace LLP is also relatively very bullish on the stock, designating 0.0047 percent of its 13F equity portfolio to WPG.
Due to the fact that Washington Prime Group Inc. (NYSE:WPG) has faced bearish sentiment from the aggregate hedge fund industry, it's safe to say that there lies a certain "tier" of money managers that decided to sell off their entire stakes last quarter. At the top of the heap, Dmitry Balyasny's Balyasny Asset Management sold off the biggest investment of the "upper crust" of funds monitored by Insider Monkey, totaling close to $2.8 million in stock. Donald Sussman's fund, Paloma Partners, also said goodbye to its stock, about $1.5 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Washington Prime Group Inc. (NYSE:WPG) but similarly valued. These stocks are Willis Lease Finance Corporation (NASDAQ:WLFC), Codorus Valley Bancorp, Inc. (NASDAQ:CVLY), Auburn National Bancorporation, Inc. (NASDAQ:AUBN), and Natural Resource Partners LP (NYSE:NRP). This group of stocks' market caps match WPG's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WLFC,4,12461,-4 CVLY,4,9861,-1 AUBN,1,266,-1 NRP,4,7619,1 Average,3.25,7552,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.25 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $2 million in WPG's case. Willis Lease Finance Corporation (NASDAQ:WLFC) is the most popular stock in this table. On the other hand Auburn National Bancorporation, Inc. (NASDAQ:AUBN) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Washington Prime Group Inc. (NYSE:WPG) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd and still beat the market by 15.9 percentage points. Unfortunately WPG wasn't nearly as popular as these 10 stocks and hedge funds that were betting on WPG were disappointed as the stock returned 18% during the second quarter (through June 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
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