Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Essential Properties Realty Trust, Inc. (NYSE:EPRT) based on that data.
Essential Properties Realty Trust, Inc. (NYSE:EPRT) shareholders have witnessed a decrease in support from the world’s most elite money managers recently. Our calculations also showed that EPRT isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
To the average investor there are a large number of methods investors use to appraise stocks. Two of the less utilized methods are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can outclass their index-focused peers by a significant amount (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a look at the latest hedge fund action surrounding Essential Properties Realty Trust, Inc. (NYSE:EPRT).
How are hedge funds trading Essential Properties Realty Trust, Inc. (NYSE:EPRT)?
Heading into the second quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in EPRT over the last 18 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, D E Shaw, managed by D. E. Shaw, holds the most valuable position in Essential Properties Realty Trust, Inc. (NYSE:EPRT). D E Shaw has a $6.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Citadel Investment Group, led by Ken Griffin, holding a $1.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions consist of David Harding’s Winton Capital Management, Stuart J. Zimmer’s Zimmer Partners and Mark McMeans’s Brasada Capital Management. In terms of the portfolio weights assigned to each position Brasada Capital Management allocated the biggest weight to Essential Properties Realty Trust, Inc. (NYSE:EPRT), around 0.18% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, dishing out 0.04 percent of its 13F equity portfolio to EPRT.
Judging by the fact that Essential Properties Realty Trust, Inc. (NYSE:EPRT) has witnessed a decline in interest from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of hedgies who were dropping their entire stakes heading into Q4. It’s worth mentioning that Renaissance Technologies said goodbye to the largest investment of all the hedgies watched by Insider Monkey, valued at about $1.8 million in stock. Steve Cohen’s fund, Point72 Asset Management, also cut its stock, about $0.9 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds heading into Q4.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Essential Properties Realty Trust, Inc. (NYSE:EPRT) but similarly valued. We will take a look at Global Net Lease, Inc. (NYSE:GNL), Regenxbio Inc (NASDAQ:RGNX), Veracyte Inc (NASDAQ:VCYT), and Cinemark Holdings, Inc. (NYSE:CNK). This group of stocks’ market valuations are similar to EPRT’s market valuation.
|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 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $115 million. That figure was $11 million in EPRT’s case. Cinemark Holdings, Inc. (NYSE:CNK) is the most popular stock in this table. On the other hand Global Net Lease, Inc. (NYSE:GNL) is the least popular one with only 7 bullish hedge fund positions. Essential Properties Realty Trust, Inc. (NYSE:EPRT) is not the least popular stock in this group but hedge fund interest is still below average. 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 12.2% in 2020 through June 17th and still beat the market by 14.8 percentage points. A small number of hedge funds were also right about betting on EPRT as the stock returned 34.3% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.