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Hedge Funds Are Crazy About Howard Hughes Corp (HHC)

We can judge whether Howard Hughes Corp (NYSE:HHC) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.

Howard Hughes Corp (NYSE:HHC) has seen an increase in enthusiasm from smart money in recent months. HHC was in 33 hedge funds’ portfolio at the end of September. There were 30 hedge funds in our database with HHC positions at the end of the previous quarter.

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If you’d ask most investors, hedge funds are assumed to be worthless, old financial vehicles of years past. While there are over 8000 funds with their doors open at present, Experts at hedge fund tracking site Insider Monkey look at the crème de la crème of this group, around 700 funds. Most estimates calculate that this group of people commands the majority of all hedge funds’ total asset base, and by tailing their top stock picks, Insider Monkey has identified various investment strategies that have historically beaten Mr. Market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 18 percentage points per year for a decade in their back tests.

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Now, we’re going to go over the fresh action surrounding Howard Hughes Corp (NYSE:HHC).

Hedge fund activity in Howard Hughes Corp (NYSE:HHC)

At the end of the third quarter, a total of 33 of the hedge funds tracked by Insider Monkey were bullish in this stock, a change of 10% from the second quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were boosting their holdings considerably.

When looking at the hedgies followed by Insider Monkey, Horizon Asset Management, managed by Murray Stahl, holds the largest position in Howard Hughes Corp (NYSE:HHC). Horizon Asset Management has a $508 million position in the stock, comprising 9.2% of its 13F portfolio. The second most bullish hedge fund manager is Bill Ackman of Pershing Square, with a $409.4 million position; 2.9% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism consist of James H. Litinsky’s JHL Capital Group, Amy Minella’s Cardinal Capital and Jane Mendillo’s Harvard Management Co.

As one would reasonably expect, key hedge funds were breaking ground themselves. Renaissance Technologies, managed by Jim Simons, established the biggest position in Howard Hughes Corp (NYSE:HHC). Renaissance Technologies had 22.1 million invested in the company at the end of the quarter. Daniel Lewis’s Orange Capital also initiated a $21.8 million position during the quarter. The other funds with new positions in the stock are David S. Winter and David J. Millstone’s 40 North Management, Israel Englander’s Millennium Management, and Peter Muller’s PDT Partners.

Let’s also review hedge fund activity in other stocks similar to Howard Hughes Corp (NYSE:HHC). These stocks are Legg Mason, Inc. (NYSE:LM), Align Technology, Inc. (NASDAQ:ALGN), Ares Capital Corporation (NASDAQ:ARCC), and Servicemaster Global Holdings Inc (NYSE:SERV). All of these stocks’ market caps match HHC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LM 33 1240024 -6
ALGN 26 325365 -4
ARCC 23 57510 5
SERV 34 775727 -1

With the returns demonstrated by the aforementioned studies, everyday investors must always monitor hedge fund activity, and Howard Hughes Corp (NYSE:HHC) shareholders fit into this picture quite nicely.

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