Hedge Funds Are Buying istar Inc (STAR)

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 March 31st, so let’s proceed with the discussion of the hedge fund sentiment on istar Inc (NYSE:STAR).

Is istar Inc (NYSE:STAR) a superb investment today? Investors who are in the know were betting on the stock. The number of bullish hedge fund bets inched up by 6 lately. istar Inc (NYSE:STAR) was in 22 hedge funds’ portfolios at the end of March. The all time high for this statistic is 23. Our calculations also showed that STAR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 16 hedge funds in our database with STAR holdings at the end of December.

If you’d ask most traders, hedge funds are perceived as slow, old investment vehicles of the past. While there are more than 8000 funds in operation at present, We look at the moguls of this club, about 850 funds. These investment experts administer bulk of the hedge fund industry’s total capital, and by following their inimitable equity investments, Insider Monkey has figured out several investment strategies that have historically outperformed Mr. Market. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Michael Weinstock - Monarch Alternative Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s go over the latest hedge fund action surrounding istar Inc (NYSE:STAR).

Do Hedge Funds Think STAR Is A Good Stock To Buy Now?

At the end of March, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 38% from one quarter earlier. By comparison, 14 hedge funds held shares or bullish call options in STAR a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is STAR A Good Stock To Buy?

Among these funds, Monarch Alternative Capital held the most valuable stake in istar Inc (NYSE:STAR), which was worth $44.5 million at the end of the fourth quarter. On the second spot was Nut Tree Capital which amassed $42.7 million worth of shares. LMR Partners, Arrowstreet Capital, and Glendon Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Nut Tree Capital allocated the biggest weight to istar Inc (NYSE:STAR), around 8.89% of its 13F portfolio. Monarch Alternative Capital is also relatively very bullish on the stock, earmarking 3.01 percent of its 13F equity portfolio to STAR.

As aggregate interest increased, some big names have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most valuable position in istar Inc (NYSE:STAR). Arrowstreet Capital had $11 million invested in the company at the end of the quarter. Matthew Barrett’s Glendon Capital Management also initiated a $10.7 million position during the quarter. The other funds with brand new STAR positions are Dmitry Balyasny’s Balyasny Asset Management, Charles Fitzgerald’s V3 Capital, and John Overdeck and David Siegel’s Two Sigma Advisors.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as istar Inc (NYSE:STAR) but similarly valued. These stocks are US Ecology Inc. (NASDAQ:ECOL), Noble Midstream Partners LP (NYSE:NBLX), Azure Power Global Limited (NYSE:AZRE), TriMas Corp (NASDAQ:TRS), Tupperware Brands Corporation (NYSE:TUP), Aclaris Therapeutics, Inc. (NASDAQ:ACRS), and Metromile, Inc. (NASDAQ:MILE). This group of stocks’ market valuations match STAR’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ECOL 6 17512 -2
NBLX 1 263 -2
AZRE 9 47856 0
TRS 11 95301 -3
TUP 16 77569 2
ACRS 30 655030 7
MILE 19 105719 19
Average 13.1 142750 3

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.1 hedge funds with bullish positions and the average amount invested in these stocks was $143 million. That figure was $182 million in STAR’s case. Aclaris Therapeutics, Inc. (NASDAQ:ACRS) is the most popular stock in this table. On the other hand Noble Midstream Partners LP (NYSE:NBLX) is the least popular one with only 1 bullish hedge fund positions. istar Inc (NYSE:STAR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for STAR is 74.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Hedge funds were also right about betting on STAR as the stock returned 31.5% since the end of Q1 (through 7/16) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Follow Istar Inc. (LON:STAR)

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Disclosure: None. This article was originally published at Insider Monkey.