Hedge Funds Have Never Been This Bullish On Weingarten Realty Investors (WRI)

Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in Q4 due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average over the long-term. The top 20 stocks among hedge funds beat the S&P 500 Index ETF by 4 percentage points so far this year. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Weingarten Realty Investors (NYSE:WRI) from the perspective of those elite funds.

Is Weingarten Realty Investors (NYSE:WRI) a buy right now? Hedge funds are in a bullish mood. The number of long hedge fund bets improved by 7 recently. Our calculations also showed that WRI isn’t among the 30 most popular stocks among hedge funds (see the video below). WRI was in 20 hedge funds’ portfolios at the end of the second quarter of 2019. There were 13 hedge funds in our database with WRI holdings at the end of the previous quarter.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Clint Carlson, Carlson Capital

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a look at the latest hedge fund action surrounding Weingarten Realty Investors (NYSE:WRI).

How have hedgies been trading Weingarten Realty Investors (NYSE:WRI)?

At Q2’s end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 54% from the first quarter of 2019. Below, you can check out the change in hedge fund sentiment towards WRI over the last 16 quarters. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

No of Hedge Funds with WRI Positions

More specifically, Carlson Capital was the largest shareholder of Weingarten Realty Investors (NYSE:WRI), with a stake worth $26.5 million reported as of the end of March. Trailing Carlson Capital was Waterfront Capital Partners, which amassed a stake valued at $19.4 million. Two Sigma Advisors, Echo Street Capital Management, and Renaissance Technologies were also very fond of the stock, giving the stock large weights in their portfolios.

As one would reasonably expect, key hedge funds have jumped into Weingarten Realty Investors (NYSE:WRI) headfirst. Echo Street Capital Management, managed by Greg Poole, established the most valuable position in Weingarten Realty Investors (NYSE:WRI). Echo Street Capital Management had $8.3 million invested in the company at the end of the quarter. Daniel Johnson’s Gillson Capital also initiated a $6 million position during the quarter. The other funds with brand new WRI positions are Paul Tudor Jones’s Tudor Investment Corp, Dmitry Balyasny’s Balyasny Asset Management, and Steve Cohen’s Point72 Asset Management.

Let’s also examine hedge fund activity in other stocks similar to Weingarten Realty Investors (NYSE:WRI). We will take a look at Mercury General Corporation (NYSE:MCY), AppFolio Inc (NASDAQ:APPF), LivaNova PLC (NASDAQ:LIVN), and PBF Energy Inc (NYSE:PBF). This group of stocks’ market values are similar to WRI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MCY 16 191028 1
APPF 12 264675 -3
LIVN 16 183188 -4
PBF 26 358655 4
Average 17.5 249387 -0.5

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 $249 million. That figure was $103 million in WRI’s case. PBF Energy Inc (NYSE:PBF) is the most popular stock in this table. On the other hand AppFolio Inc (NASDAQ:APPF) is the least popular one with only 12 bullish hedge fund positions. Weingarten Realty Investors (NYSE:WRI) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on WRI as the stock returned 7.8% during the third quarter and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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