Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Cousins Properties Incorporated (NYSE:CUZ).
Is Cousins Properties Incorporated (NYSE:CUZ) an exceptional investment now? The smart money is in a bullish mood. The number of bullish hedge fund positions advanced by 5 in recent months. Our calculations also showed that cuz isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to take a peek at the new hedge fund action surrounding Cousins Properties Incorporated (NYSE:CUZ).
What does the smart money think about Cousins Properties Incorporated (NYSE:CUZ)?
At the end of the first quarter, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 29% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CUZ over the last 15 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Millennium Management held the most valuable stake in Cousins Properties Incorporated (NYSE:CUZ), which was worth $40.3 million at the end of the first quarter. On the second spot was Renaissance Technologies which amassed $37.4 million worth of shares. Moreover, Balyasny Asset Management, Citadel Investment Group, and Shoals Capital Management were also bullish on Cousins Properties Incorporated (NYSE:CUZ), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, specific money managers have been driving this bullishness. Shoals Capital Management, managed by Jeffrey Hinkle, created the most valuable position in Cousins Properties Incorporated (NYSE:CUZ). Shoals Capital Management had $7.2 million invested in the company at the end of the quarter. Minhua Zhang’s Weld Capital Management also initiated a $2.7 million position during the quarter. The following funds were also among the new CUZ investors: Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Richard Driehaus’s Driehaus Capital, and Bruce Kovner’s Caxton Associates LP.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Cousins Properties Incorporated (NYSE:CUZ) but similarly valued. We will take a look at Pebblebrook Hotel Trust (NYSE:PEB), Floor & Decor Holdings, Inc. (NYSE:FND), Healthcare Realty Trust Inc (NYSE:HR), and Hutchison China MediTech Limited (NASDAQ:HCM). This group of stocks’ market caps match CUZ’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 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $143 million. That figure was $138 million in CUZ’s case. Floor & Decor Holdings, Inc. (NYSE:FND) is the most popular stock in this table. On the other hand Hutchison China MediTech Limited (NASDAQ:HCM) is the least popular one with only 6 bullish hedge fund positions. Cousins Properties Incorporated (NYSE:CUZ) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but 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 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately CUZ wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on CUZ were disappointed as the stock returned -5.9% during the same period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.