The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Brixmor Property Group Inc (NYSE:BRX) and determine whether the smart money was really smart about this stock.
Is Brixmor Property Group Inc (NYSE:BRX) the right pick for your portfolio? Investors who are in the know were cutting their exposure. The number of long hedge fund bets were cut by 4 recently. Brixmor Property Group Inc (NYSE:BRX) was in 24 hedge funds’ portfolios at the end of June. The all time high for this statistics is 28. Our calculations also showed that BRX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 28 hedge funds in our database with BRX holdings at the end of March.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Now let’s take a peek at the fresh hedge fund action surrounding Brixmor Property Group Inc (NYSE:BRX).
What have hedge funds been doing with Brixmor Property Group Inc (NYSE:BRX)?
At the end of June, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from the first quarter of 2020. On the other hand, there were a total of 15 hedge funds with a bullish position in BRX a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Brixmor Property Group Inc (NYSE:BRX). Citadel Investment Group has a $22 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Clint Carlson of Carlson Capital, with a $16.4 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism contain Renaissance Technologies, Cliff Asness’s AQR Capital Management and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Hill Winds Capital allocated the biggest weight to Brixmor Property Group Inc (NYSE:BRX), around 3.68% of its 13F portfolio. Carlson Capital is also relatively very bullish on the stock, dishing out 0.45 percent of its 13F equity portfolio to BRX.
Since Brixmor Property Group Inc (NYSE:BRX) has witnessed falling interest from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of fund managers who were dropping their positions entirely last quarter. Intriguingly, David Harding’s Winton Capital Management cut the largest stake of the 750 funds watched by Insider Monkey, totaling close to $4.1 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also sold off its stock, about $2.8 million worth. These transactions are interesting, as total hedge fund interest dropped by 4 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to Brixmor Property Group Inc (NYSE:BRX). These stocks are Acuity Brands, Inc. (NYSE:AYI), TopBuild Corp (NYSE:BLD), Nexstar Media Group, Inc. (NASDAQ:NXST), InVitae Corporation (NYSE:NVTA), frontdoor, inc. (NASDAQ:FTDR), LendingTree, Inc (NASDAQ:TREE), and Hexcel Corporation (NYSE:HXL). This group of stocks’ market valuations resemble BRX’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.6 hedge funds with bullish positions and the average amount invested in these stocks was $495 million. That figure was $83 million in BRX’s case. Nexstar Media Group, Inc. (NASDAQ:NXST) is the most popular stock in this table. On the other hand LendingTree, Inc (NASDAQ:TREE) is the least popular one with only 15 bullish hedge fund positions. Brixmor Property Group Inc (NYSE:BRX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BRX is 43.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 21.3% in 2020 through September 25th and surpassed the market by 17.7 percentage points. Unfortunately BRX wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); BRX investors were disappointed as the stock returned -11.1% since Q2 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.