Hedge Funds Are Dumping HCP, Inc. (HCP): Do They Know Something You Don’t?

Due to the fact that HCP, Inc. (NYSE:HCP) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of fund managers who were dropping their full holdings by the end of the third quarter. Intriguingly, Greg Poole’s Echo Street Capital Management said goodbye to the largest stake of the 700 funds followed by Insider Monkey, comprising an estimated $8.5 million in stock. David E. Shaw’s D E Shaw, also dropped its stock, about $7.8 million worth.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as HCP, Inc. (NYSE:HCP) but similarly valued. We will take a look at Molson Coors Brewing Company (NYSE:TAP), Ingersoll-Rand PLC (NYSE:IR), American Airlines Group Inc (NASDAQ:AAL), and Rogers Communications Inc. (USA) (NYSE:RCI). All of these stocks’ market caps are similar to HCP’s market cap.

As you can see these stocks had an average of 40 hedge funds with bullish positions and the average amount invested in these stocks was $1.74 billion. That figure was $154 million in HCP’s case. Molson Coors Brewing Company (NYSE:TAP) is the most popular stock in this table. On the other hand Rogers Communications Inc. (USA) (NYSE:RCI) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks HCP, Inc. (NYSE:HCP) is only as popular as RCI. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None