Hedge Funds Are Crazy About istar Inc (STAR)

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards istar Inc (NYSE:STAR) .

istar Inc (NYSE:STAR) was in 19 hedge funds’ portfolios at the end of the third quarter of 2016. STAR investors should pay attention to an increase in activity from the world’s largest hedge funds recently. There were 16 hedge funds in our database with STAR holdings at the end of the previous quarter. 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 Greenlight Capital Re, Ltd. (NASDAQ:GLRE), Sandstorm Gold Ltd. (NYSE:SAND), and Encore Wire Corporation (NASDAQ:WIRE) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

How are hedge funds trading istar Inc (NYSE:STAR)?

At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a rise of 19% from one quarter earlier. On the other hand, there were a total of 23 hedge funds with a bullish position in STAR at the beginning of this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Ric Dillon’s Diamond Hill Capital has the number one position in istar Inc (NYSE:STAR), worth close to $80.2 million. On Diamond Hill Capital’s heels is David Gallo of Valinor Management LLC holding a $51.4 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Other peers that hold long positions include Kenneth Tropin’s Graham Capital Management, Michael Swotes’ Castle Ridge Investment Management and Matthew Hulsizer’s PEAK6 Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Now, specific money managers have jumped into istar Inc (NYSE:STAR) headfirst. Mike Vranos’ Ellington created the largest position in istar Inc (NYSE:STAR). Ellington had $0.5 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also initiated a $0.3 million position during the quarter. The following funds were also among the new STAR investors: Andrew Weiss’ Weiss Asset Management, Ken Griffin’s Citadel Investment Group, and George Hall’s Clinton Group.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as istar Inc (NYSE:STAR) but similarly valued. These stocks are Greenlight Capital Re, Ltd. (NASDAQ:GLRE), Sandstorm Gold Ltd. (NYSE:SAND), Encore Wire Corporation (NASDAQ:WIRE), and Constellium NV (NYSE:CSTM). This group of stocks’ market caps are closest to STAR’s market cap.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $97 million. That figure was $184 million in STAR’s case. Constellium NV (NYSE:CSTM) is the most popular stock in this table. On the other hand Sandstorm Gold Ltd. (NYSE:SAND) is the least popular one with only 11 bullish hedge fund positions. istar Inc (NYSE:STAR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CSTM might be a better candidate to consider taking a long position in.

Disclosure: None