Is Equity Commonwealth (NYSE:EQC) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Equity Commonwealth (NYSE:EQC) has seen an increase in support from the world’s most elite money managers lately. Equity Commonwealth (NYSE:EQC) was in 21 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 28. There were 18 hedge funds in our database with EQC holdings at the end of December. Our calculations also showed that EQC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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John Rogers of Ariel Investments
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Do Hedge Funds Think EQC Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards EQC over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Ariel Investments was the largest shareholder of Equity Commonwealth (NYSE:EQC), with a stake worth $42.4 million reported as of the end of March. Trailing Ariel Investments was Renaissance Technologies, which amassed a stake valued at $34.9 million. Hudson Way Capital Management, Royce & Associates, and Driehaus Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Hudson Way Capital Management allocated the biggest weight to Equity Commonwealth (NYSE:EQC), around 4.34% of its 13F portfolio. MD Sass is also relatively very bullish on the stock, designating 0.75 percent of its 13F equity portfolio to EQC.
As aggregate interest increased, key hedge funds have been driving this bullishness. Royce & Associates, managed by Chuck Royce, established the biggest position in Equity Commonwealth (NYSE:EQC). Royce & Associates had $15.3 million invested in the company at the end of the quarter. Ali Motamed’s Invenomic Capital Management also initiated a $2.5 million position during the quarter. The following funds were also among the new EQC investors: Bruce Kovner’s Caxton Associates LP, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Donald Sussman’s Paloma Partners.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Equity Commonwealth (NYSE:EQC) but similarly valued. We will take a look at Cerence Inc. (NASDAQ:CRNC), Cantel Medical Corp. (NYSE:CMD), Korn Ferry (NYSE:KFY), Atlas Corp. (NYSE:ATCO), NuVasive, Inc. (NASDAQ:NUVA), Kratos Defense & Security Solutions, Inc (NASDAQ:KTOS), and Revolution Medicines, Inc. (NASDAQ:RVMD). This group of stocks’ market caps are similar to EQC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CRNC | 20 | 213371 | 6 |
| CMD | 30 | 592747 | 8 |
| KFY | 16 | 226581 | -1 |
| ATCO | 12 | 1424585 | -6 |
| NUVA | 20 | 272025 | -5 |
| KTOS | 16 | 194053 | -2 |
| RVMD | 26 | 643312 | 0 |
| Average | 20 | 509525 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $510 million. That figure was $183 million in EQC’s case. Cantel Medical Corp. (NYSE:CMD) is the most popular stock in this table. On the other hand Atlas Corp. (NYSE:ATCO) is the least popular one with only 12 bullish hedge fund positions. Equity Commonwealth (NYSE:EQC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EQC is 55.5. 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 positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately EQC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on EQC were disappointed as the stock returned -2.5% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Equity Commonwealth (NYSE:EQC)
Follow Equity Commonwealth (NYSE:EQC)
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Disclosure: None. This article was originally published at Insider Monkey.
