Hedge Funds Have Shifted Their Position On Rexford Industrial Realty Inc (REXR)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Rexford Industrial Realty Inc (NYSE:REXR) and determine whether the smart money was really smart about this stock.

Rexford Industrial Realty Inc (NYSE:REXR) was in 24 hedge funds’ portfolios at the end of June. The all time high for this statistics is 21. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. REXR has experienced an increase in support from the world’s most elite money managers of late. There were 15 hedge funds in our database with REXR positions at the end of the first quarter. Our calculations also showed that REXR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

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 monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Richard Driehaus of Driehaus Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Keeping this in mind let’s check out the latest hedge fund action encompassing Rexford Industrial Realty Inc (NYSE:REXR).

How are hedge funds trading Rexford Industrial Realty Inc (NYSE:REXR)?

At Q2’s end, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 60% from the first quarter of 2020. On the other hand, there were a total of 17 hedge funds with a bullish position in REXR a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is REXR A Good Stock To Buy?

Of the funds tracked by Insider Monkey, Millennium Management, managed by Israel Englander, holds the biggest position in Rexford Industrial Realty Inc (NYSE:REXR). Millennium Management has a $45.8 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies,  which holds a $22.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish contain Eduardo Abush’s Waterfront Capital Partners, Robert Boucai’s Newbrook Capital Advisors and Greg Poole’s Echo Street Capital Management. In terms of the portfolio weights assigned to each position Waterfront Capital Partners allocated the biggest weight to Rexford Industrial Realty Inc (NYSE:REXR), around 3.14% of its 13F portfolio. Hill Winds Capital is also relatively very bullish on the stock, earmarking 2.83 percent of its 13F equity portfolio to REXR.

Now, key hedge funds were breaking ground themselves. Waterfront Capital Partners, managed by Eduardo Abush, created the largest position in Rexford Industrial Realty Inc (NYSE:REXR). Waterfront Capital Partners had $19.1 million invested in the company at the end of the quarter. Robert Boucai’s Newbrook Capital Advisors also initiated a $15.1 million position during the quarter. The following funds were also among the new REXR investors: Greg Poole’s Echo Street Capital Management, Clint Carlson’s Carlson Capital, and John Khoury’s Long Pond Capital.

Let’s now review hedge fund activity in other stocks similar to Rexford Industrial Realty Inc (NYSE:REXR). We will take a look at ITT Inc. (NYSE:ITT), Brunswick Corporation (NYSE:BC), National Instruments Corporation (NASDAQ:NATI), CDK Global Inc (NASDAQ:CDK), Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC), Lincoln Electric Holdings, Inc. (NASDAQ:LECO), and Euronet Worldwide, Inc. (NASDAQ:EEFT). This group of stocks’ market caps resemble REXR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ITT 25 512144 -3
BC 35 1425715 12
NATI 35 259007 6
CDK 32 323704 8
TKC 5 48945 2
LECO 22 204039 3
EEFT 37 311496 7
Average 27.3 440721 5

View table here if you experience formatting issues.

As you can see these stocks had an average of 27.3 hedge funds with bullish positions and the average amount invested in these stocks was $441 million. That figure was $179 million in REXR’s case. Euronet Worldwide, Inc. (NASDAQ:EEFT) is the most popular stock in this table. On the other hand Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) is the least popular one with only 5 bullish hedge fund positions. Rexford Industrial Realty Inc (NYSE:REXR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for REXR is 69.7. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 21.3% in 2020 through September 25th and beat the market by 17.7 percentage points. A small number of hedge funds were also right about betting on REXR, though not to the same extent, as the stock returned 8% so far during Q3 and outperformed the market.

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