While the market driven by short-term sentiment influenced by uncertainty regarding the future of the interest rate environment in the US, the low commodity prices and the economic turmoil in China, many smart money investors are keeping their optimism regarding the current bull run, while still hedging many of their long positions. However, as we know, big investors usually buy stocks with strong fundamentals, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Parkway Properties Inc (NYSE:PKY).
Parkway Properties Inc (NYSE:PKY) was in 7 hedge funds’ portfolios at the end of September. PKY investors should pay attention to a decrease in activity from the world’s largest hedge funds of late. There were 9 hedge funds in our database with PKY 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 Media General, Inc. (NYSE:MEG), MKS Instruments, Inc. (NASDAQ:MKSI), and Lexmark International Inc (NYSE:LXK) to gather more data points.
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To most traders, hedge funds are viewed as worthless, outdated financial tools of years past. While there are greater than an 8000 funds in operation at the moment, We hone in on the leaders of this club, approximately 700 funds. Most estimates calculate that this group of people shepherd the lion’s share of the smart money’s total capital, and by monitoring their first-class equity investments, Insider Monkey has unearthed several investment strategies that have historically outpaced the broader indices. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per year for a decade in their back tests.
With all of this in mind, we’re going to go over the latest action surrounding Parkway Properties Inc (NYSE:PKY).
How are hedge funds trading Parkway Properties Inc (NYSE:PKY)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of -22% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Israel Englander’s Millennium Management has the biggest position in Parkway Properties Inc (NYSE:PKY), worth close to $21.6 million, corresponding to less than 0.1% of its total 13F portfolio. On Millennium Management’s heels is Balyasny Asset Management, managed by Dmitry Balyasny, which holds a $11.5 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other professional money managers that are bullish comprise Millennium Management Subsidiary’s Decade Capital Management, Ken Griffin’s Citadel Investment Group and J. Alan Reid, Jr.’s Forward Management.
Seeing as Parkway Properties Inc (NYSE:PKY) has experienced a declination in interest from the entirety of the hedge funds we track, logic holds that there were a few hedge funds who sold off their full holdings in the third quarter. It’s worth mentioning that Jim Simons’ Renaissance Technologies said goodbye to the biggest investment of all the hedgies tracked by Insider Monkey, totaling about $2.4 million in stock. Gavin Saitowitz and Cisco J. del Valle’s fund, Springbok Capital, also dropped its stock, about $1.6 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 2 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Parkway Properties Inc (NYSE:PKY) but similarly valued. We will take a look at Media General, Inc. (NYSE:MEG), MKS Instruments, Inc. (NASDAQ:MKSI), Lexmark International Inc (NYSE:LXK), and Cornerstone OnDemand, Inc. (NASDAQ:CSOD). All of these stocks’ market caps match PKY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MEG | 25 | 496034 | 1 |
| MKSI | 23 | 350198 | 1 |
| LXK | 21 | 392937 | -1 |
| CSOD | 21 | 261329 | -1 |
As you can see these stocks had an average of 22.5 hedge funds with bullish positions and the average amount invested in these stocks was $375 million. That figure was $41 million in PKY’s case. Media General, Inc. (NYSE:MEG) is the most popular stock in this table. On the other hand Lexmark International Inc (NYSE:LXK) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Parkway Properties Inc (NYSE:PKY) is even less popular than LXK. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
