We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Peltz’s recent General Electric losses). However, it is still good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Cedar Realty Trust Inc (NYSE:CDR).
Cedar Realty Trust Inc (NYSE:CDR) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 12 hedge funds’ portfolios at the end of the third quarter of 2018. 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 resTORbio, Inc. (NASDAQ:TORC), Trinity Merger Corp. (NASDAQ:TMCX), and Barnes & Noble, Inc. (NYSE:BKS) to gather more data points.
According to most traders, hedge funds are viewed as slow, old financial vehicles of years past. While there are more than 8,000 funds trading at the moment, We hone in on the leaders of this club, about 700 funds. These hedge fund managers administer bulk of the smart money’s total asset base, and by shadowing their inimitable stock picks, Insider Monkey has uncovered a few investment strategies that have historically outperformed Mr. Market. Insider Monkey’s flagship hedge fund strategy beat the S&P 500 index by 6 percentage points annually since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
Let’s view the fresh hedge fund action surrounding Cedar Realty Trust Inc (NYSE:CDR).
How are hedge funds trading Cedar Realty Trust Inc (NYSE:CDR)?
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, no change from one quarter earlier. By comparison, 12 hedge funds held shares or bullish call options in CDR heading into this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Cedar Realty Trust Inc (NYSE:CDR) was held by GLG Partners, which reported holding $7.3 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $6.2 million position. Other investors bullish on the company included Millennium Management, MHR Fund Management, and AQR Capital Management.
Seeing as Cedar Realty Trust Inc (NYSE:CDR) has witnessed a decline in interest from hedge fund managers, logic holds that there exists a select few fund managers that slashed their positions entirely last quarter. Intriguingly, Jeffrey Pierce’s Snow Park Capital Partners dropped the biggest stake of the 700 funds tracked by Insider Monkey, totaling close to $12.5 million in stock. D. E. Shaw’s fund, D E Shaw, also dropped its stock, about $0.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Cedar Realty Trust Inc (NYSE:CDR) but similarly valued. These stocks are resTORbio, Inc. (NASDAQ:TORC), Trinity Merger Corp. (NASDAQ:TMCX), Barnes & Noble, Inc. (NYSE:BKS), and Farmers National Banc Corp (NASDAQ:FMNB). All of these stocks’ market caps resemble CDR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TORC | 4 | 89978 | 1 |
| TMCX | 16 | 67758 | 2 |
| BKS | 16 | 17313 | 4 |
| FMNB | 6 | 13054 | 1 |
| Average | 10.5 | 47026 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $24 million in CDR’s case. Trinity Merger Corp. (NASDAQ:TMCX) is the most popular stock in this table. On the other hand resTORbio, Inc. (NASDAQ:TORC) is the least popular one with only 4 bullish hedge fund positions. Cedar Realty Trust Inc (NYSE:CDR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TMCX might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
