Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Hedge Funds Hate These 10 Large-Caps, Part 2

Page 1 of 2

As we discussed in the first part of this article, by the end of 2007 hedge funds held nearly 10% of the outstanding shares of an average company listed on U.S stock exchanges. Companies having huge backing from the hedge fund industry in terms of share ownership concentration are commonly referred to as ‘hedge fund hotels’ and in times of crises they can face sharp declines in share price as these money managers check out of their “hotels”. Nonetheless, these stocks make for attractive investments, as they represent companies that multiple smart money investors are extremely bullish on. Let’s now take a look at the next five stocks on our list of ten companies that haven’t gained any kind of traction among hedgies and therefore may not represent very good investments right now. Note that foreign companies such as those listed as (ADR) or (USA) on U.S exchanges have not been considered for the purposes of this article, owing to their general lack of popularity among hedgies.

General Growth Properties Inc (NYSE:GGP)

 – Concentration of Ownership (as of September 30): 1.2%

 – Investors with Long Positions (as of September 30): 27

 – Aggregate Value of Investors’ Holdings (as of September 30): $271.83 Million

While the total number of money managers backing General Growth Properties Inc (NYSE:GGP) increased by five during the July-to-September period, the aggregate value of these holdings slid by $45.26 million. Since the stock rose by 1.3% during this period, it can be concluded that hedgies were generally keen on reducing their exposure to the retail REIT, which offers a dividend yield of 2.93%. Although the company managed to marginally beat bottom line estimates in its financial results for the third quarter, it missed top line expectations. Well-known fund Millennium Management, led by Israel Englander, owns about 3.18 million shares of General Growth Properties Inc (NYSE:GGP).

Synchrony Financial (NYSE:SYF)

 – Concentration of Ownership (as of September 30): 1.1%

 – Investors with Long Positions (as of September 30): 21

 – Aggregate Value of Investors’ Holdings (as of September 30): $291.57 Million

Although the hedge fund concentration in the $25.89 billion consumer financial services company remains very small, hedge funds were fairly bullish towards Synchrony during the third quarter. The total number of hedge funds with ownership of the company increased by eight, while the aggregate value of their holdings appreciated by more than 125%. The investor exuberence came despite a 5.8% fall in Synchrony Financial (NYSE:SYF)’s stock price during this period. So far this year, the stock is trading nearly sideways. Sterne Agee CRT recently upgraded the stock to ‘Buy’ from ‘Neutral’, and has a price target of $38 on it, which suggests upside of about 26%. Matthew Halbower‘s Pentwater Capital Management owns about 3.05 million shares of Synchrony Financial (NYSE:SYF).

Follow Synchrony Financial (NYSE:SYF)
Trade (NYSE:SYF) Now!

In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8,000 funds in operation at present, Insider Monkey looks at only the aristocrats of this group, around 730 funds. Contrary to popular belief, Insider Monkey’s research revealed that hedge funds underperformed in recent years because of their short positions as well as the huge fees that they charge, not because they are not good at picking stocks on the long side of their portfolios. Hedge funds did in fact manage to outperform the market on the long side of their portfolios. In fact, the 15 most popular small-cap stocks among hedge funds has returned 102% since the end of August 2012, beat the S&P 500 Index by 53 percentage points (see the details here).

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...
X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!