Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Simon Property Group, Inc (NYSE:SPG) changed recently.
Is Simon Property Group, Inc (NYSE:SPG) a first-rate stock to buy now? Money managers were taking a bearish view. The number of long hedge fund positions shrunk by 1 in recent months. Simon Property Group, Inc (NYSE:SPG) was in 31 hedge funds’ portfolios at the end of March. The all time high for this statistic is 32. Our calculations also showed that SPG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 homepage. With all of this in mind we’re going to go over the recent hedge fund action surrounding Simon Property Group, Inc (NYSE:SPG).
Do Hedge Funds Think SPG Is A Good Stock To Buy Now?
At the end of March, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from the fourth quarter of 2020. On the other hand, there were a total of 29 hedge funds with a bullish position in SPG a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Ken Griffin’s Citadel Investment Group has the biggest position in Simon Property Group, Inc (NYSE:SPG), worth close to $121.1 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which holds a $62.4 million call position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that are bullish include Jack Woodruff’s Candlestick Capital Management, Brandon Haley’s Holocene Advisors and Phill Gross and Robert Atchinson’s Adage Capital Management. In terms of the portfolio weights assigned to each position Capital Growth Management allocated the biggest weight to Simon Property Group, Inc (NYSE:SPG), around 2.18% of its 13F portfolio. CQS Cayman LP is also relatively very bullish on the stock, designating 1.35 percent of its 13F equity portfolio to SPG.
Because Simon Property Group, Inc (NYSE:SPG) has faced falling interest from the smart money, it’s easy to see that there lies a certain “tier” of hedgies who were dropping their full holdings in the first quarter. Intriguingly, Jacob Mitchell’s Antipodes Partners sold off the biggest position of the 750 funds watched by Insider Monkey, valued at an estimated $88.1 million in stock, and Joe DiMenna’s ZWEIG DIMENNA PARTNERS was right behind this move, as the fund cut about $15.1 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 1 funds in the first quarter.
Let’s now review hedge fund activity in other stocks similar to Simon Property Group, Inc (NYSE:SPG). These stocks are Aptiv PLC (NYSE:APTV), Centene Corporation (NYSE:CNC), IQVIA Holdings, Inc. (NYSE:IQV), CRH PLC (NYSE:CRH), Mizuho Financial Group Inc. (NYSE:MFG), Carrier Global Corporation (NYSE:CARR), and Canadian Natural Resources Limited (NYSE:CNQ). This group of stocks’ market valuations match SPG’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 37 hedge funds with bullish positions and the average amount invested in these stocks was $1525 million. That figure was $506 million in SPG’s case. IQVIA Holdings, Inc. (NYSE:IQV) is the most popular stock in this table. On the other hand Mizuho Financial Group Inc. (NYSE:MFG) is the least popular one with only 5 bullish hedge fund positions. Simon Property Group, Inc (NYSE:SPG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SPG is 55.9. 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 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 22.8% in 2021 through July 2nd and beat the market by 6 percentage points. A small number of hedge funds were also right about betting on SPG, though not to the same extent, as the stock returned 16.5% since the end of Q1 (through July 2nd) and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.