Has Hedge Fund Ownership in Welltower Inc. (HCN) Finally Bottomed Out?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Welltower Inc. (NYSE:HCN) .

Hedge fund interest in Welltower Inc. (NYSE:HCN) shares was flat during the third quarter. This is usually a negative indicator. 20 hedge funds that we track owned the stock on September 30, same as on June 30. At the end of this article we will also compare HCN to other stocks including Anadarko Petroleum Corporation (NYSE:APC), Sherwin-Williams Company (NYSE:SHW), and LIBERTY GLOBAL PLC (NASDAQ:LBTYK) to get a better sense of its popularity.

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Hedge fund activity in Welltower Inc. (NYSE:HCN)

At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, unmoved from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HCN over the last 5 quarters, which has consistently trended down, though by small increments. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, AEW Capital Management, led by Jeffrey Furber, holds the most valuable position in Welltower Inc. (NYSE:HCN). AEW Capital Management has a $285.7 million position in the stock, comprising 5.9% of its 13F portfolio. On AEW Capital Management’s heels is Renaissance Technologies, led by Jim Simons, which holds a $154.1 million position. Remaining members of the smart money that are bullish contain Israel Englander’s Millennium Management, Phill Gross and Robert Atchinson’s Adage Capital Management, and Cliff Asness’ AQR Capital 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.

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that cut their entire stakes in the stock during the third quarter. Interestingly, Benjamin A. Smith’s Laurion Capital Management cut the biggest stake of all the investors monitored by Insider Monkey, worth about $8.6 million in call options. Ken Griffin’s fund, Citadel Investment Group, also sold off its call options, about $7.8 million worth.

Let’s check out hedge fund activity in other stocks similar to Welltower Inc. (NYSE:HCN). These stocks are Anadarko Petroleum Corporation (NYSE:APC), Sherwin-Williams Company (NYSE:SHW), LIBERTY GLOBAL PLC (NASDAQ:LBTYK), and Manulife Financial Corporation (USA) (NYSE:MFC). This group of stocks’ market valuations match HCN’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
APC 65 3899227 17
SHW 50 2237039 5
LBTYK 56 5713173 -4
MFC 13 197047 -3

As you can see these stocks had an average of 46 hedge funds with bullish positions and the average amount invested in these stocks was $3.01 billion. That figure was $710 million in HCN’s case. Anadarko Petroleum Corporation (NYSE:APC) is the most popular stock in this table. On the other hand Manulife Financial Corporation (USA) (NYSE:MFC) is the least popular one with only 13 bullish hedge fund positions. Welltower Inc. (NYSE:HCN) 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 APC might be a better candidate to consider taking a long position in.

Disclosure: None