In this article we will take a look at whether hedge funds think Alexander’s, Inc. (NYSE:ALX) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Alexander’s, Inc. (NYSE:ALX) has experienced a decrease in hedge fund interest recently. ALX was in 8 hedge funds’ portfolios at the end of March. There were 13 hedge funds in our database with ALX positions at the end of the previous quarter. Our calculations also showed that ALX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a lot of metrics shareholders employ to appraise publicly traded companies. Some of the less utilized metrics are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the top money managers can trounce the market by a significant amount (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to go over the fresh hedge fund action regarding Alexander’s, Inc. (NYSE:ALX).
How are hedge funds trading Alexander’s, Inc. (NYSE:ALX)?
At the end of the first quarter, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of -38% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in ALX over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, EMS Capital held the most valuable stake in Alexander’s, Inc. (NYSE:ALX), which was worth $69.1 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $35.9 million worth of shares. Millennium Management, Citadel Investment Group, and D E Shaw 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 EMS Capital allocated the biggest weight to Alexander’s, Inc. (NYSE:ALX), around 7.16% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, setting aside 0.65 percent of its 13F equity portfolio to ALX.
Since Alexander’s, Inc. (NYSE:ALX) has experienced a decline in interest from hedge fund managers, we can see that there was a specific group of fund managers that decided to sell off their positions entirely last quarter. It’s worth mentioning that John Khoury’s Long Pond Capital dropped the biggest investment of all the hedgies monitored by Insider Monkey, valued at close to $27.3 million in stock. Michael Gelband’s fund, ExodusPoint Capital, also sold off its stock, about $0.8 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 5 funds last quarter.
Let’s check out hedge fund activity in other stocks similar to Alexander’s, Inc. (NYSE:ALX). These stocks are Chesapeake Utilities Corporation (NYSE:CPK), KEMET Corporation (NYSE:KEM), Urban Outfitters, Inc. (NASDAQ:URBN), and SSR Mining Inc. (NASDAQ:SSRM). All of these stocks’ market caps resemble ALX’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 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $127 million. That figure was $110 million in ALX’s case. Urban Outfitters, Inc. (NASDAQ:URBN) is the most popular stock in this table. On the other hand Chesapeake Utilities Corporation (NYSE:CPK) is the least popular one with only 7 bullish hedge fund positions. Alexander’s, Inc. (NYSE:ALX) 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th and surpassed the market by 14.8 percentage points. Unfortunately ALX wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); ALX investors were disappointed as the stock returned -4.7% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.