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Hedge Funds Souring On Industrial Logistics Properties Trust (ILPT)

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Industrial Logistics Properties Trust (NASDAQ:ILPT) based on those filings.

Industrial Logistics Properties Trust (NASDAQ:ILPT) has experienced a decrease in hedge fund interest lately. Our calculations also showed that ILPT 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.

At the moment there are dozens of tools investors employ to assess publicly traded companies. Two of the less utilized tools are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the elite hedge fund managers can outpace the market by a healthy margin (see the details here).

Dmitry Balyasny of Balyasny Asset Managemnet

Dmitry Balyasny of Balyasny Asset Management

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 top 15 defense contractors 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. With all of this in mind let’s analyze the key hedge fund action regarding Industrial Logistics Properties Trust (NASDAQ:ILPT).

How are hedge funds trading Industrial Logistics Properties Trust (NASDAQ:ILPT)?

At the end of the first quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -31% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in ILPT over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Ken Griffin’s Citadel Investment Group has the biggest position in Industrial Logistics Properties Trust (NASDAQ:ILPT), worth close to $20 million, corresponding to less than 0.1%% of its total 13F portfolio. On Citadel Investment Group’s heels is Bayberry Capital Partners, led by Angela Aldrich, holding a $15.9 million position; 6.5% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism consist of Renaissance Technologies, Dmitry Balyasny’s Balyasny Asset Management and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Bayberry Capital Partners allocated the biggest weight to Industrial Logistics Properties Trust (NASDAQ:ILPT), around 6.47% of its 13F portfolio. Balyasny Asset Management is also relatively very bullish on the stock, setting aside 0.09 percent of its 13F equity portfolio to ILPT.

Judging by the fact that Industrial Logistics Properties Trust (NASDAQ:ILPT) has witnessed falling interest from the aggregate hedge fund industry, we can see that there lies a certain “tier” of hedgies that decided to sell off their full holdings in the first quarter. Intriguingly, Derek C. Schrier’s Indaba Capital Management cut the biggest position of the “upper crust” of funds tracked by Insider Monkey, totaling an estimated $7.4 million in stock, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors was right behind this move, as the fund dropped about $1.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 4 funds in the first quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Industrial Logistics Properties Trust (NASDAQ:ILPT). These stocks are Coherus Biosciences Inc (NASDAQ:CHRS), Dana Incorporated (NYSE:DAN), Altra Industrial Motion Corp. (NASDAQ:AIMC), and Sykes Enterprises, Incorporated (NASDAQ:SYKE). All of these stocks’ market caps match ILPT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CHRS 35 216871 3
DAN 28 143927 1
AIMC 15 80915 0
SYKE 14 56085 -4
Average 23 124450 0

View table here if you experience formatting issues.

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $124 million. That figure was $61 million in ILPT’s case. Coherus Biosciences Inc (NASDAQ:CHRS) is the most popular stock in this table. On the other hand Sykes Enterprises, Incorporated (NASDAQ:SYKE) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Industrial Logistics Properties Trust (NASDAQ:ILPT) is even less popular than SYKE. Hedge funds dodged a bullet by taking a bearish stance towards ILPT. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but managed to beat the market by 15.9 percentage points. Unfortunately ILPT wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); ILPT investors were disappointed as the stock returned 18.2% during the second quarter (through June 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.

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