Hedge Funds Are Selling Prologis Inc (PLD)

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Prologis Inc (NYSE:PLD), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Is Prologis Inc (NYSE:PLD) a good investment today? Hedge funds were turning less bullish. The number of long hedge fund positions decreased by 8 recently. Prologis Inc (NYSE:PLD) was in 32 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 40. Our calculations also showed that PLD isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Martin Whitman Third Avenue Management Marty Whitman

Martin Whitman of Third Avenue Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to go over the recent hedge fund action encompassing Prologis Inc (NYSE:PLD).

Do Hedge Funds Think PLD Is A Good Stock To Buy Now?

At third quarter’s end, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in PLD over the last 25 quarters. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

Is PLD A Good Stock To Buy?

According to Insider Monkey’s hedge fund database, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the most valuable position in Prologis Inc (NYSE:PLD). Adage Capital Management has a $107 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Citadel Investment Group, led by Ken Griffin, holding a $98.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism comprise Cliff Asness’s AQR Capital Management, Martin Whitman’s Third Avenue Management and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Third Avenue Management allocated the biggest weight to Prologis Inc (NYSE:PLD), around 4.31% of its 13F portfolio. Socorro Asset Management is also relatively very bullish on the stock, earmarking 2.73 percent of its 13F equity portfolio to PLD.

Seeing as Prologis Inc (NYSE:PLD) has witnessed bearish sentiment from the smart money, we can see that there were a few funds that slashed their full holdings last quarter. It’s worth mentioning that Eduardo Abush’s Waterfront Capital Partners dropped the largest position of the “upper crust” of funds followed by Insider Monkey, totaling an estimated $33.8 million in stock. Ken Heebner’s fund, Capital Growth Management, also sold off its stock, about $12 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 8 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Prologis Inc (NYSE:PLD). We will take a look at Zoetis Inc (NYSE:ZTS), BP plc (NYSE:BP), Snowflake Inc (NYSE:SNOW), Anthem Inc (NYSE:ANTM), ConocoPhillips (NYSE:COP), Analog Devices, Inc. (NASDAQ:ADI), and U.S. Bancorp (NYSE:USB). This group of stocks’ market values are closest to PLD’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ZTS 58 2713394 0
BP 29 1053236 -1
SNOW 73 14569929 3
ANTM 59 4585560 -8
COP 49 1371142 -1
ADI 74 5698767 12
USB 42 8390873 1
Average 54.9 5483272 0.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 54.9 hedge funds with bullish positions and the average amount invested in these stocks was $5483 million. That figure was $483 million in PLD’s case. Analog Devices, Inc. (NASDAQ:ADI) is the most popular stock in this table. On the other hand BP plc (NYSE:BP) is the least popular one with only 29 bullish hedge fund positions. Prologis Inc (NYSE:PLD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PLD is 24.3. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. A small number of hedge funds were also right about betting on PLD as the stock returned 20.2% since the end of the third quarter (through 11/30) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.