Concerns over rising interest rates and expected further rate increases have hit several stocks hard during the fourth quarter of 2018. Trends reversed 180 degrees in 2019 amid Powell’s pivot and optimistic expectations towards a trade deal with China. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were increasing their overall exposure in the third quarter and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards Cedar Realty Trust Inc (NYSE:CDR).
Cedar Realty Trust Inc (NYSE:CDR) was in 10 hedge funds’ portfolios at the end of September. CDR has experienced a decrease in enthusiasm from smart money of late. There were 13 hedge funds in our database with CDR positions at the end of the previous quarter. Our calculations also showed that CDR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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Jim Simons of Renaissance Technologies
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How have hedgies been trading Cedar Realty Trust Inc (NYSE:CDR)?
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -23% from the second quarter of 2019. By comparison, 12 hedge funds held shares or bullish call options in CDR a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Cedar Realty Trust Inc (NYSE:CDR), which was worth $6.9 million at the end of the third quarter. On the second spot was D E Shaw which amassed $2.7 million worth of shares. Arrowstreet Capital, Millennium Management, and Citadel Investment Group 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 Algert Coldiron Investors allocated the biggest weight to Cedar Realty Trust Inc (NYSE:CDR), around 0.07% of its 13F portfolio. Tudor Investment Corp is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to CDR.
Since Cedar Realty Trust Inc (NYSE:CDR) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there was a specific group of hedgies who were dropping their entire stakes in the third quarter. Interestingly, Noam Gottesman’s GLG Partners cut the biggest investment of all the hedgies monitored by Insider Monkey, totaling close to $2.5 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund sold off about $0.4 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 3 funds in the third quarter.
Let’s go over hedge fund activity in other stocks similar to Cedar Realty Trust Inc (NYSE:CDR). These stocks are Greenhill & Co., Inc. (NYSE:GHL), Pfenex Inc (NYSE:PFNX), RR Donnelley & Sons Company (NASDAQ:RRD), and Denison Mines Corp (NYSE:DNN). This group of stocks’ market caps are similar to CDR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GHL | 11 | 21075 | 0 |
| PFNX | 14 | 35852 | 2 |
| RRD | 15 | 15735 | 3 |
| DNN | 3 | 1431 | -1 |
| Average | 10.75 | 18523 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $17 million in CDR’s case. RR Donnelley & Sons Company (NASDAQ:RRD) is the most popular stock in this table. On the other hand Denison Mines Corp (NYSE:DNN) is the least popular one with only 3 bullish hedge fund positions. Cedar Realty Trust Inc (NYSE:CDR) 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately CDR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CDR investors were disappointed as the stock returned -9.6% during the first two months of the fourth 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 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
