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Does Extra Space Storage, Inc. (EXR) Deserve a Space in Your Portfolio?

As industrywide interest jumped, key money managers have been driving this bullishness. Highland Capital Management assembled the most outsized position in Extra Space Storage, Inc. (NYSE:EXR). Highland Capital Management had $13.4 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $12.4 million position during the quarter. The following funds were also among the new EXR investors: Peter Muller’s PDT Partners, Michael Platt and William Reeves’ BlueCrest Capital Mgmt., and David S. Winter and David J. Millstone’s 40 North Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Extra Space Storage, Inc. (NYSE:EXR) but similarly valued. We will take a look at Cintas Corporation (NASDAQ:CTAS), Cna Financial Corp (NYSE:CNA), Federal Realty Investment Trust (NYSE:FRT), and BorgWarner Inc. (NYSE:BWA). This group of stocks’ market values resemble EXR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CTAS 27 1037662 -1
CNA 11 34608 0
FRT 13 221734 8
BWA 28 485063 2

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 $445 million. That figure was $227 million in EXR’s case. BorgWarner Inc. (NYSE:BWA) is the most popular stock in this table. On the other hand Cna Financial Corp (NYSE:CNA) is the least popular one with only 11 bullish hedge fund positions. Extra Space Storage, Inc. (NYSE:EXR) is not the least popular stock in this group but hedge fund interest and share ownership 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 BWA and CTAS might be better candidates to consider for long positions.

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