Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. These stocks have been on a tear since the end of June, outperforming large-cap index funds by more than 10 percentage points. That’s why we pay special attention to hedge fund activity in these stocks.
In this article, we’ll take a closer look at Camden Property Trust (NYSE:CPT), which registered a decline in enthusiasm from smart money last quarter. There were eight funds in our database with CPT positions at the end of September. 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 Gartner Inc (NYSE:IT), New Oriental Education & Tech Grp (ADR) (NYSE:EDU), and Helmerich & Payne, Inc. (NYSE:HP) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, we’re going to take a glance at the new action surrounding Camden Property Trust (NYSE:CPT).
How are hedge funds trading Camden Property Trust (NYSE:CPT)?
Heading into the fourth quarter of 2016, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, down by 20% from the previous quarter. On the other hand, there were a total of 19 hedge funds with a bullish position in CPT at the beginning of 2016. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Jeffrey Furber’s AEW Capital Management has the number one position in Camden Property Trust (NYSE:CPT), worth close to $127.2 million, corresponding to 2.6% of its total 13F portfolio. The second most bullish fund manager is Breton Hill Capital, led by Ray Carroll, which holds a $7.7 million position; 2.3% of its 13F portfolio is allocated to the company. Some other peers that hold long positions include Cliff Asness’ AQR Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Ken Fisher’s Fisher Asset Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Judging by the fact that Camden Property Trust (NYSE:CPT) has faced bearish sentiment from the aggregate hedge fund industry, logic holds that there exists a select few funds that slashed their full holdings heading into Q4. Intriguingly, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital said goodbye to the biggest position of the “upper crust” of funds monitored by Insider Monkey, valued at close to $1.2 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also dumped its stock, about $0.2 million worth.
Let’s also examine hedge fund activity in other stocks similar to Camden Property Trust (NYSE:CPT). These stocks are Gartner Inc (NYSE:IT), New Oriental Education & Tech Grp (ADR) (NYSE:EDU), Helmerich & Payne, Inc. (NYSE:HP), and AerCap Holdings N.V. (NYSE:AER). This group of stocks’ market valuations match CPT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IT | 20 | 352111 | -2 |
| EDU | 20 | 288666 | 0 |
| HP | 25 | 287195 | 1 |
| AER | 32 | 1377736 | -4 |
As you can see these stocks had an average of 24 funds with bullish positions and the average amount invested in these stocks was $576 million, versus $149 million in CPT’s case. AerCap Holdings N.V. (NYSE:AER) is the most popular stock in this table. On the other hand Gartner Inc (NYSE:IT) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks Camden Property Trust (NYSE:CPT) is even less popular than IT. 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.
Disclosure: None
