Here’s What Hedge Funds Think About Retail Properties of America Inc (RPAI)

We at Insider Monkey have gone over 738 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of Retail Properties of America Inc (NYSE:RPAI) based on that data.

Retail Properties of America Inc (NYSE:RPAI) was in 16 hedge funds’ portfolios at the end of the first quarter of 2019. RPAI shareholders have witnessed an increase in hedge fund interest lately. There were 15 hedge funds in our database with RPAI positions at the end of the previous quarter. Our calculations also showed that rpai isn’t among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (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 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Dmitry Balyasny

We’re going to take a look at the new hedge fund action regarding Retail Properties of America Inc (NYSE:RPAI).

What does smart money think about Retail Properties of America Inc (NYSE:RPAI)?

At Q1’s end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in RPAI over the last 15 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

No of Hedge Funds with RPAI Positions

Among these funds, AEW Capital Management held the most valuable stake in Retail Properties of America Inc (NYSE:RPAI), which was worth $75.9 million at the end of the first quarter. On the second spot was Renaissance Technologies which amassed $72.1 million worth of shares. Moreover, Millennium Management, Balyasny Asset Management, and GLG Partners were also bullish on Retail Properties of America Inc (NYSE:RPAI), allocating a large percentage of their portfolios to this stock.

Consequently, specific money managers have been driving this bullishness. Zimmer Partners, managed by Stuart J. Zimmer, established the largest position in Retail Properties of America Inc (NYSE:RPAI). Zimmer Partners had $3.7 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also made a $0.6 million investment in the stock during the quarter. The following funds were also among the new RPAI investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Paul Tudor Jones’s Tudor Investment Corp, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Retail Properties of America Inc (NYSE:RPAI) but similarly valued. We will take a look at Hillenbrand, Inc. (NYSE:HI), Repligen Corporation (NASDAQ:RGEN), Acadia Healthcare Company Inc (NASDAQ:ACHC), and Emergent Biosolutions Inc (NYSE:EBS). This group of stocks’ market valuations are similar to RPAI’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HI 20 49575 2
RGEN 20 67468 -2
ACHC 19 463095 1
EBS 11 185718 -5
Average 17.5 191464 -1

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $191 million. That figure was $206 million in RPAI’s case. Hillenbrand, Inc. (NYSE:HI) is the most popular stock in this table. On the other hand Emergent Biosolutions Inc (NYSE:EBS) is the least popular one with only 11 bullish hedge fund positions. Retail Properties of America Inc (NYSE:RPAI) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately RPAI wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); RPAI investors were disappointed as the stock returned 1.6% 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 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.

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