Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 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 Alexander’s, Inc. (NYSE:ALX) in this article.
Is ALX a good stock to buy now? Alexander’s, Inc. (NYSE:ALX) shareholders have witnessed an increase in support from the world’s most elite money managers in recent months. Alexander’s, Inc. (NYSE:ALX) was in 10 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 13. Our calculations also showed that ALX isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
At the moment there are dozens of formulas market participants can use to evaluate stocks. Some of the less utilized formulas are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the elite fund managers can outperform the S&P 500 by a significant margin (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. With all of this in mind let’s take a gander at the fresh hedge fund action surrounding Alexander’s, Inc. (NYSE:ALX).
Do Hedge Funds Think ALX Is A Good Stock To Buy Now?
At third quarter’s end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ALX over the last 21 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, EMS Capital was the largest shareholder of Alexander’s, Inc. (NYSE:ALX), with a stake worth $61.4 million reported as of the end of September. Trailing EMS Capital was Renaissance Technologies, which amassed a stake valued at $31.4 million. Millennium Management, Citadel Investment Group, and ExodusPoint Capital 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 EMS Capital allocated the biggest weight to Alexander’s, Inc. (NYSE:ALX), around 5.71% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, setting aside 0.55 percent of its 13F equity portfolio to ALX.
As industrywide interest jumped, key money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, created the biggest position in Alexander’s, Inc. (NYSE:ALX). Citadel Investment Group had $1.7 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also initiated a $0.4 million position during the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Alexander’s, Inc. (NYSE:ALX). We will take a look at Seabridge Gold, Inc. (NYSE:SA), CBIZ, Inc. (NYSE:CBZ), ACM Research, Inc. (NASDAQ:ACMR), Columbia Property Trust Inc (NYSE:CXP), Xperi Holding Corporation (NASDAQ:XPER), Retail Properties of America Inc (NYSE:RPAI), and CVR Energy, Inc. (NYSE:CVI). This group of stocks’ market values are similar to ALX’s market value.
|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 15.1 hedge funds with bullish positions and the average amount invested in these stocks was $214 million. That figure was $100 million in ALX’s case. Xperi Holding Corporation (NASDAQ:XPER) is the most popular stock in this table. On the other hand Seabridge Gold, Inc. (NYSE:SA) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Alexander’s, Inc. (NYSE:ALX) is even less popular than SA. Our overall hedge fund sentiment score for ALX is 30.1. 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 ALX as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on ALX as the stock returned 15.6% since Q3 (through December 8th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.