Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Is Highwoods Properties Inc (NYSE:HIW) a first-rate investment today? Hedge funds are becoming more confident. The number of bullish hedge fund bets increased by 1 in recent months. HIW was in 9 hedge funds’ portfolios at the end of the third quarter of 2015. There were 8 hedge funds in our database with HIW 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 Urban Outfitters, Inc. (NASDAQ:URBN), Sun Communities Inc (NYSE:SUI), and Solera Holdings Inc (NYSE:SLH) to gather more data points.
Follow Highwoods Properties Inc. (NYSE:HIW)
Follow Highwoods Properties Inc. (NYSE:HIW)
At the moment there are many methods stock traders use to grade their stock investments. A pair of the most under-the-radar methods are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the best investment managers can outperform the broader indices by a solid amount (see the details here).
With all of this in mind, we’re going to take a glance at the fresh action encompassing Highwoods Properties Inc (NYSE:HIW).
How are hedge funds trading Highwoods Properties Inc (NYSE:HIW)?
At the Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Millennium Management, managed by Israel Englander, holds the most valuable position in Highwoods Properties Inc (NYSE:HIW). Millennium Management has an $51.9 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Winton Capital Management, led by David Harding, holding an $22.3 million position; 0.2% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions include Jim Simons’ Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Cliff Asness’s AQR Capital Management.
Now, some big names were leading the bulls’ herd. Echo Street Capital Management, managed by Greg Poole, assembled the most valuable position in Highwoods Properties Inc (NYSE:HIW). Echo Street Capital Management had $0.7 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated an $0.5 million position during the quarter. The only other fund with a brand new HIW position is Chao Ku’s Nine Chapters Capital Management.
Let’s go over hedge fund activity in other stocks similar to Highwoods Properties Inc (NYSE:HIW). We will take a look at Urban Outfitters, Inc. (NASDAQ:URBN), Sun Communities Inc (NYSE:SUI), Solera Holdings Inc (NYSE:SLH), and PTC Inc (NASDAQ:PTC). This group of stocks’ market caps are closest to HIW’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| URBN | 24 | 160271 | -4 |
| SUI | 6 | 51953 | -1 |
| SLH | 38 | 982618 | 20 |
| PTC | 33 | 691759 | 12 |
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $472 million, significantly higher than the $89 million figure in HIW’s case. Solera Holdings Inc (NYSE:SLH) is the most popular stock in this table. On the other hand Sun Communities Inc (NYSE:SUI) is the least popular one with only 6 bullish hedge fund positions. Highwoods Properties Inc (NYSE:HIW) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SLH might be a better candidate to consider a long position.
