Here is What Hedge Funds Think About CubeSmart (CUBE)

Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about CubeSmart (NYSE:CUBE).

Is CubeSmart (NYSE:CUBE) going to take off soon? The best stock pickers were in an optimistic mood. The number of long hedge fund positions rose by 4 in recent months. CubeSmart (NYSE:CUBE) was in 22 hedge funds’ portfolios at the end of September. The all time high for this statistic is 27. Our calculations also showed that CUBE isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s take a look at the new hedge fund action surrounding CubeSmart (NYSE:CUBE).

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Do Hedge Funds Think CUBE Is A Good Stock To Buy Now?

At third quarter’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 22% from one quarter earlier. On the other hand, there were a total of 18 hedge funds with a bullish position in CUBE 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.

More specifically, Millennium Management was the largest shareholder of CubeSmart (NYSE:CUBE), with a stake worth $49.1 million reported as of the end of September. Trailing Millennium Management was Renaissance Technologies, which amassed a stake valued at $24.9 million. Capital Growth Management, Balyasny Asset Management, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Capital Growth Management allocated the biggest weight to CubeSmart (NYSE:CUBE), around 2.25% of its 13F portfolio. Navellier & Associates is also relatively very bullish on the stock, setting aside 0.5 percent of its 13F equity portfolio to CUBE.

As one would reasonably expect, specific money managers were leading the bulls’ herd. Renaissance Technologies, initiated the most valuable position in CubeSmart (NYSE:CUBE). Renaissance Technologies had $24.9 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $19.3 million position during the quarter. The other funds with brand new CUBE positions are Peter Algert’s Algert Global, Bruce Kovner’s Caxton Associates LP, and Paul Tudor Jones’s Tudor Investment Corp.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as CubeSmart (NYSE:CUBE) but similarly valued. We will take a look at Penumbra Inc (NYSE:PEN), A. O. Smith Corporation (NYSE:AOS), Manhattan Associates, Inc. (NASDAQ:MANH), McAfee Corp. (NASDAQ:MCFE), CyrusOne Inc (NASDAQ:CONE), Lithia Motors Inc (NYSE:LAD), and Amdocs Limited (NASDAQ:DOX). All of these stocks’ market caps match CUBE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PEN 33 553799 3
AOS 29 564878 3
MANH 25 475224 -3
MCFE 31 330697 13
CONE 27 495607 1
LAD 64 2823225 1
DOX 24 824398 -5
Average 33.3 866833 1.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 33.3 hedge funds with bullish positions and the average amount invested in these stocks was $867 million. That figure was $225 million in CUBE’s case. Lithia Motors Inc (NYSE:LAD) is the most popular stock in this table. On the other hand Amdocs Limited (NASDAQ:DOX) is the least popular one with only 24 bullish hedge fund positions. Compared to these stocks CubeSmart (NYSE:CUBE) is even less popular than DOX. Our overall hedge fund sentiment score for CUBE is 33.4. 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. Hedge funds clearly dropped the ball on CUBE as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on CUBE as the stock returned 18.4% since Q3 (through December 31st) and outperformed the market by an even larger margin.

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