The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Apartment Investment and Management Co. (NYSE:AIV) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Apartment Investment and Management Co. (NYSE:AIV) investors should pay attention to an increase in support from the world’s most elite money managers recently. Apartment Investment and Management Co. (NYSE:AIV) was in 24 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 28. There were 21 hedge funds in our database with AIV holdings at the end of March. Our calculations also showed that AIV isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. With all of this in mind we’re going to review the recent hedge fund action regarding Apartment Investment and Management Co. (NYSE:AIV).
Hedge fund activity in Apartment Investment and Management Co. (NYSE:AIV)
At the end of June, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AIV over the last 20 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Long Pond Capital, managed by John Khoury, holds the largest position in Apartment Investment and Management Co. (NYSE:AIV). Long Pond Capital has a $202.9 million position in the stock, comprising 8% of its 13F portfolio. The second largest stake is held by Citadel Investment Group, led by Ken Griffin, holding a $103 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers that are bullish encompass Renaissance Technologies, Charles Fitzgerald’s V3 Capital and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Long Pond Capital allocated the biggest weight to Apartment Investment and Management Co. (NYSE:AIV), around 8.01% of its 13F portfolio. V3 Capital is also relatively very bullish on the stock, designating 5.64 percent of its 13F equity portfolio to AIV.
As one would reasonably expect, key hedge funds have jumped into Apartment Investment and Management Co. (NYSE:AIV) headfirst. Land & Buildings Investment Management, managed by Jonathan Litt, established the most valuable position in Apartment Investment and Management Co. (NYSE:AIV). Land & Buildings Investment Management had $13.6 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $10.6 million position during the quarter. The other funds with new positions in the stock are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Thomas Bailard’s Bailard Inc, and Bruce Kovner’s Caxton Associates LP.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Apartment Investment and Management Co. (NYSE:AIV) but similarly valued. We will take a look at AppFolio Inc (NASDAQ:APPF), Zions Bancorporation, National Association (NASDAQ:ZION), Ingredion Incorporated (NYSE:INGR), Kimco Realty Corp (NYSE:KIM), Teck Resources Ltd (NYSE:TECK), SolarWinds Corporation (NYSE:SWI), and Casey’s General Stores, Inc. (NASDAQ:CASY). This group of stocks’ market valuations are similar to AIV’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 23.1 hedge funds with bullish positions and the average amount invested in these stocks was $530 million. That figure was $489 million in AIV’s case. Kimco Realty Corp (NYSE:KIM) is the most popular stock in this table. On the other hand SolarWinds Corporation (NYSE:SWI) is the least popular one with only 19 bullish hedge fund positions. Apartment Investment and Management Co. (NYSE:AIV) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AIV is 61.5. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 21.3% in 2020 through September 25th and beat the market by 17.7 percentage points. Unfortunately AIV wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on AIV were disappointed as the stock returned -9% during the same time period 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.