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Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 823 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Boston Properties, Inc. (NYSE:BXP) in this article.
Boston Properties, Inc. (NYSE:BXP) shareholders have witnessed an increase in hedge fund sentiment in recent months. Boston Properties, Inc. (NYSE:BXP) was in 36 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 29. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BXP isn't among the 30 most popular stocks among hedge funds (click for Q2 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.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 56 percentage points since March 2017 (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 34% through August 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 most profitable companies in the world 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 to get excerpts of these letters in your inbox. Keeping this in mind we're going to go over the key hedge fund action surrounding Boston Properties, Inc. (NYSE:BXP).
Hedge fund activity in Boston Properties, Inc. (NYSE:BXP)
Heading into the third quarter of 2020, a total of 36 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 24% from the first quarter of 2020. By comparison, 23 hedge funds held shares or bullish call options in BXP a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
Among these funds, D E Shaw held the most valuable stake in Boston Properties, Inc. (NYSE:BXP), which was worth $100 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $60.9 million worth of shares. Millennium Management, Renaissance Technologies, and Rima Senvest Management 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 Hill Winds Capital allocated the biggest weight to Boston Properties, Inc. (NYSE:BXP), around 5.19% of its 13F portfolio. Waterfront Capital Partners is also relatively very bullish on the stock, earmarking 2.99 percent of its 13F equity portfolio to BXP.
As aggregate interest increased, some big names have been driving this bullishness. Rima Senvest Management, managed by Richard Mashaal, initiated the most valuable position in Boston Properties, Inc. (NYSE:BXP). Rima Senvest Management had $45.8 million invested in the company at the end of the quarter. Dmitry Balyasny's Balyasny Asset Management also initiated a $34.2 million position during the quarter. The other funds with new positions in the stock are John Khoury's Long Pond Capital, Eduardo Abush's Waterfront Capital Partners, and Daniel Johnson's Gillson Capital.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Boston Properties, Inc. (NYSE:BXP) but similarly valued. These stocks are EPAM Systems Inc (NYSE:EPAM), Teradyne, Inc. (NASDAQ:TER), Dover Corporation (NYSE:DOV), Rollins, Inc. (NYSE:ROL), International Paper Company (NYSE:IP), The Hartford Financial Services Group Inc (NYSE:HIG), and Tyler Technologies, Inc. (NYSE:TYL). This group of stocks' market values are closest to BXP's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EPAM,28,482887,1 TER,34,1354430,6 DOV,40,683970,9 ROL,29,577262,4 IP,29,238219,0 HIG,39,917896,2 TYL,36,533929,6 Average,33.6,684085,4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.6 hedge funds with bullish positions and the average amount invested in these stocks was $684 million. That figure was $539 million in BXP's case. Dover Corporation (NYSE:DOV) is the most popular stock in this table. On the other hand EPAM Systems Inc (NYSE:EPAM) is the least popular one with only 28 bullish hedge fund positions. Boston Properties, Inc. (NYSE:BXP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BXP is 73.3. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 23% in 2020 through October 30th and beat the market again by 20.1 percentage points. Unfortunately BXP wasn't nearly as popular as these 10 stocks and hedge funds that were betting on BXP were disappointed as the stock returned -18.9% since the end of June (through 10/30) 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 many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.