Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Hospitality Properties Trust (NASDAQ:HPT) in this article.
Hospitality Properties Trust (NASDAQ:HPT) shareholders have witnessed a decrease in hedge fund interest in recent months. Our calculations also showed that HPT isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s analyze the fresh hedge fund action surrounding Hospitality Properties Trust (NASDAQ:HPT).
How have hedgies been trading Hospitality Properties Trust (NASDAQ:HPT)?
At Q1’s end, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -31% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HPT over the last 15 quarters. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
The largest stake in Hospitality Properties Trust (NASDAQ:HPT) was held by Renaissance Technologies, which reported holding $40.3 million worth of stock at the end of March. It was followed by Pzena Investment Management with a $15.7 million position. Other investors bullish on the company included Two Sigma Advisors, Citadel Investment Group, and Citadel Investment Group.
Seeing as Hospitality Properties Trust (NASDAQ:HPT) has witnessed a decline in interest from hedge fund managers, it’s safe to say that there is a sect of funds that decided to sell off their entire stakes in the third quarter. At the top of the heap, Matthew Tewksbury’s Stevens Capital Management cut the biggest investment of the 700 funds watched by Insider Monkey, worth close to $1.9 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also dumped its stock, about $1.4 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 5 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Hospitality Properties Trust (NASDAQ:HPT) but similarly valued. These stocks are Spark Therapeutics Inc (NASDAQ:ONCE), Western Alliance Bancorporation (NYSE:WAL), OneMain Holdings Inc (NYSE:OMF), and Lancaster Colony Corporation (NASDAQ:LANC). This group of stocks’ market valuations match HPT’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 29.75 hedge funds with bullish positions and the average amount invested in these stocks was $495 million. That figure was $68 million in HPT’s case. Spark Therapeutics Inc (NASDAQ:ONCE) is the most popular stock in this table. On the other hand Lancaster Colony Corporation (NASDAQ:LANC) is the least popular one with only 24 bullish hedge fund positions. Compared to these stocks Hospitality Properties Trust (NASDAQ:HPT) is even less popular than LANC. Hedge funds dodged a bullet by taking a bearish stance towards HPT. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately HPT wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); HPT investors were disappointed as the stock returned -1.5% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published at Insider Monkey.