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In this article you are going to find out whether hedge funds think Camden Property Trust (NYSE:CPT) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is Camden Property Trust (NYSE:CPT) an exceptional investment right now? Prominent investors were becoming less hopeful. The number of long hedge fund positions shrunk by 2 in recent months. Camden Property Trust (NYSE:CPT) was in 24 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 32. Our calculations also showed that CPT isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Bruce Kovner of Caxton Associates LP
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we're going to take a look at the recent hedge fund action encompassing Camden Property Trust (NYSE:CPT).
Do Hedge Funds Think CPT Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CPT over the last 23 quarters. With hedge funds' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
More specifically, Long Pond Capital was the largest shareholder of Camden Property Trust (NYSE:CPT), with a stake worth $183 million reported as of the end of March. Trailing Long Pond Capital was V3 Capital, which amassed a stake valued at $101.1 million. Angelo Gordon & Co, Millennium Management, and Balyasny Asset 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 V3 Capital allocated the biggest weight to Camden Property Trust (NYSE:CPT), around 18.75% of its 13F portfolio. Angelo Gordon & Co is also relatively very bullish on the stock, designating 8.43 percent of its 13F equity portfolio to CPT.
Since Camden Property Trust (NYSE:CPT) has witnessed a decline in interest from the entirety of the hedge funds we track, logic holds that there exists a select few hedge funds who sold off their entire stakes last quarter. It's worth mentioning that Jonathan Litt's Land & Buildings Investment Management dumped the biggest stake of all the hedgies tracked by Insider Monkey, worth an estimated $8.1 million in stock. Phill Gross and Robert Atchinson's fund, Adage Capital Management, also dumped its stock, about $2.6 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 2 funds last quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Camden Property Trust (NYSE:CPT) but similarly valued. We will take a look at Essential Utilities Inc (NYSE:WTRG), A. O. Smith Corporation (NYSE:AOS), Apollo Global Management Inc (NYSE:APO), Lear Corporation (NYSE:LEA), Credicorp Ltd. (NYSE:BAP), AGCO Corporation (NYSE:AGCO), and Ozon Holdings PLC (NASDAQ:OZON). All of these stocks' market caps are similar to CPT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WTRG,19,266338,6 AOS,24,420942,-7 APO,44,2362179,14 LEA,23,1217537,-13 BAP,22,236121,7 AGCO,36,552596,-4 OZON,17,136135,-4 Average,26.4,741693,-0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.4 hedge funds with bullish positions and the average amount invested in these stocks was $742 million. That figure was $615 million in CPT's case. Apollo Global Management Inc (NYSE:APO) is the most popular stock in this table. On the other hand Ozon Holdings PLC (NASDAQ:OZON) is the least popular one with only 17 bullish hedge fund positions. Camden Property Trust (NYSE:CPT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CPT is 38.5. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. A small number of hedge funds were also right about betting on CPT as the stock returned 31.8% since the end of the first quarter (through 7/16) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.