Seritage Growth Properties (SRG): Is Shrinking Smart Money Ownership Cause for Concern?

Because Seritage Growth Properties (NYSE:SRG) has experienced falling interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of money managers who sold off their positions entirely heading into Q4. It’s worth mentioning that Matthew Knauer and Mina Faltas’ Nokota Management sold off the largest stake of all the hedgies monitored by Insider Monkey, comprising close to $8.2 million in stock. Gordy Holterman and Derek Dunn’s fund, Overland Advisors, also cut its stock, about $5.4 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 1 fund heading into Q4.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Seritage Growth Properties (NYSE:SRG) but similarly valued. These stocks are Home Bancshares Inc (NASDAQ:HOMB), Vector Group Ltd (NYSE:VGR), Fresh Del Monte Produce Inc (NYSE:FDP), and GameStop Corp. (NYSE:GME). This group of stocks’ market caps are similar to SRG’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 $171 million. That figure was $372 million in SRG’s case. GameStop Corp. (NYSE:GME) is the most popular stock in this table. On the other hand Home Bancshares Inc (NASDAQ:HOMB) is the least popular one with only 9 bullish hedge fund positions. Seritage Growth Properties (NYSE:SRG) 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 GME might be a better candidate to consider for a long position.

Disclosure: None