We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional losses; they do (like Ackman’s recent Valeant losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the latest smart money sentiment towards Realogy Holdings Corp (NYSE:RLGY).
Realogy Holdings Corp (NYSE:RLGY) was in 48 hedge funds’ portfolio at the end of September. Realogy Holdings Corp (NYSE:RLGY) shareholders have witnessed an increase in hedge fund sentiment of late. There were 42 hedge funds in our database with Realogy Holdings Corp (NYSE:RLGY) positions at the end of the previous quarter. At the end of this article we will also compare Realogy Holdings Corp (NYSE:RLGY) to other stocks including Allegion PLC (NYSE:ALLE), IDEX Corporation (NYSE:IEX), and Randgold Resources Ltd. (ADR) (NASDAQ:GOLD) to get a better sense of its popularity.
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To the average investor there are a lot of gauges investors have at their disposal to grade publicly traded companies. Some of the best gauges are hedge fund and insider trading signals. Experts at Insider Monkey, a website specializing in hedge funds, have shown that, historically, those who follow the top picks of the top money managers can outclass the market by a superb amount (see the details here).
With all of this in mind, let’s take a look at the fresh action regarding Realogy Holdings Corp (NYSE:RLGY).
How have hedgies been trading Realogy Holdings Corp (NYSE:RLGY)?
Heading into Q4, a total of 48 of the hedge funds tracked by Insider Monkey were bullish in this stock, an increase of 14% from the second quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes meaningfully.
According to hedge fund experts at Insider Monkey, Senator Investment Group, managed by Doug Silverman and Alexander Klabin, holds the number one position in Realogy Holdings Corp (NYSE:RLGY). Senator Investment Group has a $282.2 million position in the stock, comprising 3.4% of its 13F portfolio. Sitting in second spot is Paulson & Co, managed by John Paulson, which holds a $265 million position; 1.4% of its 13F portfolio is allocated to the stock. Remaining hedge funds that hold long positions comprise Larry Robbins’ Glenview Capital, Alan Fournier’s Pennant Capital Management, and D E Shaw.
Consequently, specific money managers were breaking ground themselves. ClearBridge created the most outsized position in Realogy Holdings Corp (NYSE:RLGY). ClearBridge had $41.9 million invested in the company at the end of the quarter. Clint Carlson’s Carlson Capital also initiated a $28.2 million position during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Louis Bacon’s Moore Global Investments, and John Croghan and Richard Fradin’s Rail-Splitter Capital Management.
Let’s check out hedge fund activity in other stocks similar to Realogy Holdings Corp (NYSE:RLGY). We will take a look at Allegion PLC (NYSE:ALLE), IDEX Corporation (NYSE:IEX), Randgold Resources Ltd. (ADR) (NASDAQ:GOLD), and Agnico-Eagle Mines Limited (USA) (NYSE:AEM). This group of stocks’ market values are similar to Realogy Holdings Corp (NYSE:RLGY)’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $542 million. In contrast, investors in our database held $2.03 billion worth of Realogy shares, totaling 36.80% of its outstanding shares. Allegion PLC (NYSE:ALLE) is the most popular stock in this table. On the other hand IDEX Corporation (NYSE:IEX) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Realogy Holdings Corp (NYSE:RLGY) is more popular among hedge funds. Considering that hedge funds are fond of this stock, that it’s growing in popularity, and that top investors are hoarding its shares, it may be a good idea to analyze it in detail and potentially include it in your portfolio.