Should You Buy General Growth Properties Inc (GGP)?

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Consequently, key money managers have jumped into General Growth Properties Inc (NYSE:GGP) headfirst. Long Pond Capital established the most valuable position in General Growth Properties Inc (NYSE:GGP). John Overdeck and David Siegel’s Two Sigma Advisors also made a $20.7 million investment in the stock during the quarter. The other funds with brand new GGP positions are Jonathan Litt’s Land & Buildings Investment Management, George Hall’s Clinton Group, and Greg Poole’s Echo Street Capital Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as General Growth Properties Inc (NYSE:GGP) but similarly valued. These stocks are The Allstate Corporation (NYSE:ALL), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), O’Reilly Automotive Inc (NASDAQ:ORLY), and Applied Materials, Inc. (NASDAQ:AMAT). All of these stocks’ market caps are similar to GGP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ALL 27 1109142 -2
ALXN 42 2107784 -4
ORLY 42 1836056 -2
AMAT 57 2527003 10

As you can see these stocks had an average of 42 hedge funds with bullish positions and the average amount invested in these stocks was $1.90 billion. That figure was $307 million in GGP’s case. Applied Materials, Inc. (NASDAQ:AMAT) is the most popular stock in this table. On the other hand The Allstate Corporation (NYSE:ALL) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks General Growth Properties Inc (NYSE:GGP) is only as popular as ALL. 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, especially given the surge in ownership of GGP in Q3.

Disclosure: None

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