In this article you are going to find out whether hedge funds think Healthpeak Properties, Inc. (NYSE:PEAK) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is Healthpeak Properties, Inc. (NYSE:PEAK) an excellent investment right now? The best stock pickers were in a bullish mood. The number of bullish hedge fund positions inched up by 4 lately. Healthpeak Properties, Inc. (NYSE:PEAK) was in 22 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 29. Our calculations also showed that PEAK isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Do Hedge Funds Think PEAK Is A Good Stock To Buy Now?
At second quarter’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 22% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards PEAK over the last 24 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Among these funds, Waterfront Capital Partners held the most valuable stake in Healthpeak Properties, Inc. (NYSE:PEAK), which was worth $29 million at the end of the second quarter. On the second spot was Adage Capital Management which amassed $19.4 million worth of shares. Echo Street Capital Management, D E Shaw, and Tudor Investment Corp 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 Hill Winds Capital allocated the biggest weight to Healthpeak Properties, Inc. (NYSE:PEAK), around 4.68% of its 13F portfolio. Waterfront Capital Partners is also relatively very bullish on the stock, dishing out 2.18 percent of its 13F equity portfolio to PEAK.
As one would reasonably expect, key hedge funds have been driving this bullishness. Tudor Investment Corp, managed by Paul Tudor Jones, created the biggest position in Healthpeak Properties, Inc. (NYSE:PEAK). Tudor Investment Corp had $8.8 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $7.8 million position during the quarter. The following funds were also among the new PEAK investors: Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management, Michael Gelband’s ExodusPoint Capital, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s also examine hedge fund activity in other stocks similar to Healthpeak Properties, Inc. (NYSE:PEAK). These stocks are Bentley Systems, Incorporated (NASDAQ:BSY), Boston Properties, Inc. (NYSE:BXP), Farfetch Limited (NYSE:FTCH), Affirm Holdings, Inc. (NASDAQ:AFRM), Raymond James Financial, Inc. (NYSE:RJF), Duke Realty Corporation (NYSE:DRE), and Brookfield Property Partners LP (NYSE:BPY). This group of stocks’ market caps match PEAK’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.4 hedge funds with bullish positions and the average amount invested in these stocks was $1118 million. That figure was $120 million in PEAK’s case. Farfetch Limited (NYSE:FTCH) is the most popular stock in this table. On the other hand Duke Realty Corporation (NYSE:DRE) is the least popular one with only 15 bullish hedge fund positions. Healthpeak Properties, Inc. (NYSE:PEAK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PEAK is 39.1. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on PEAK as the stock returned 5.1% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.