Is CDR A Good Stock To Buy Now?

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Cedar Realty Trust Inc (NYSE:CDR).

Is CDR a good stock to buy now? Cedar Realty Trust Inc (NYSE:CDR) shareholders have witnessed a decrease in enthusiasm from smart money in recent months. Cedar Realty Trust Inc (NYSE:CDR) was in 11 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 15. Our calculations also showed that CDR 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.

According to most traders, hedge funds are perceived as worthless, outdated financial tools of years past. While there are more than 8000 funds trading at the moment, Our researchers hone in on the aristocrats of this club, around 850 funds. These hedge fund managers preside over bulk of all hedge funds’ total asset base, and by tailing their matchless investments, Insider Monkey has spotted a number of investment strategies that have historically exceeded Mr. Market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Jay Petschek - Corsair Capital

Jay Petschek of Corsair Capital Management

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. Keeping this in mind let’s check out the key hedge fund action surrounding Cedar Realty Trust Inc (NYSE:CDR).

Do Hedge Funds Think CDR Is A Good Stock To Buy Now?

At the end of September, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -27% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CDR over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Millennium Management was the largest shareholder of Cedar Realty Trust Inc (NYSE:CDR), with a stake worth $1.8 million reported as of the end of September. Trailing Millennium Management was Renaissance Technologies, which amassed a stake valued at $1.2 million. Arrowstreet Capital, Two Sigma Advisors, and Corsair Capital Management 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 Corsair Capital Management allocated the biggest weight to Cedar Realty Trust Inc (NYSE:CDR), around 0.07% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to CDR.

Due to the fact that Cedar Realty Trust Inc (NYSE:CDR) has faced a decline in interest from hedge fund managers, we can see that there lies a certain “tier” of funds that slashed their positions entirely last quarter. Intriguingly, D. E. Shaw’s D E Shaw cut the biggest stake of the 750 funds watched by Insider Monkey, comprising an estimated $0.5 million in stock, and David Harding’s Winton Capital Management was right behind this move, as the fund dumped about $0.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 4 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Cedar Realty Trust Inc (NYSE:CDR) but similarly valued. We will take a look at Epsilon Energy Ltd. (NASDAQ:EPSN), FFBW, Inc. (NASDAQ:FFBW), ASLAN Pharmaceuticals Limited (NASDAQ:ASLN), Tantech Holdings Ltd. (NASDAQ:TANH), Clearside Biomedical, Inc. (NASDAQ:CLSD), Adamis Pharmaceuticals Corporation (NASDAQ:ADMP), and Assertio Holdings Inc. (NASDAQ:ASRT). All of these stocks’ market caps resemble CDR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EPSN 2 11939 -2
FFBW 3 3628 1
ASLN 4 3740 -1
TANH 3 1041 1
CLSD 3 1921 0
ADMP 1 16 -1
ASRT 13 14432 -5
Average 4.1 5245 -1

View table here if you experience formatting issues.

As you can see these stocks had an average of 4.1 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $4 million in CDR’s case. Assertio Holdings Inc. (NASDAQ:ASRT) is the most popular stock in this table. On the other hand Adamis Pharmaceuticals Corporation (NASDAQ:ADMP) is the least popular one with only 1 bullish hedge fund positions. Cedar Realty Trust Inc (NYSE:CDR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CDR is 64.7. 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 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. Hedge funds were also right about betting on CDR as the stock returned 62.3% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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