Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. That’s why we pay special attention to hedge fund activity in these stocks.
Columbia Property Trust Inc (NYSE:CXP) shareholders have witnessed a decrease in enthusiasm from smart money in recent months. Columbia Property Trust Inc (NYSE:CXP) was in 9 hedge funds’ portfolios at the end of the third quarter of 2015. There were 12 hedge funds in our database with Columbia Property Trust Inc (NYSE:CXP) holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Targa Resources Corp (NYSE:TRGP), Mentor Graphics Corp (NASDAQ:MENT), and Progressive Waste Solutions Ltd (USA) (NYSE:BIN) to gather more data points.
In the eyes of most market participants, hedge funds are viewed as underperforming, outdated financial vehicles of the past. While there are over 8000 funds with their doors open at present, our researchers hone in on the leaders of this group, approximately 700 funds. Most estimates calculate that this group of people handles the bulk of the hedge fund industry’s total capital, and by following their finest picks, Insider Monkey has uncovered many investment strategies that have historically beaten Mr. Market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per year for a decade in their back tests.
Now, let’s analyze the fresh action regarding Columbia Property Trust Inc (NYSE:CXP).
Hedge fund activity in Columbia Property Trust Inc (NYSE:CXP)
At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 25% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund holdings data compiled by Insider Monkey, 40 North Management, managed by David S. Winter and David J. Millstone, holds the number one position in Columbia Property Trust Inc (NYSE:CXP). 40 North Management has a $203.2 million position in the stock, comprising 14.4% of its 13F portfolio. The second most bullish fund is D E Shaw, with a $26.5 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining peers with similar optimism consist of Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, John Overdeck and David Siegel’s Two Sigma Advisors and Paul Tudor Jones’ Tudor Investment Corp.
Due to the fact that Columbia Property Trust Inc (NYSE:CXP) has experienced a decline in interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few fund managers that elected to cut their entire stakes heading into Q4. Intriguingly, Chao Ku’s Nine Chapters Capital Management dropped the largest investment of the 700 funds tracked by Insider Monkey, totaling close to $1.3 million in stock. Jim Simons’ Renaissance Technologies, also dropped its position, about $0.4 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 3 funds heading into Q4.
Let’s go over hedge fund activity in other stocks similar to Columbia Property Trust Inc (NYSE:CXP). These stocks are Targa Resources Corp (NYSE:TRGP), Mentor Graphics Corp (NASDAQ:MENT), Progressive Waste Solutions Ltd (USA) (NYSE:BIN), and Enstar Group Ltd. (NASDAQ:ESGR). This group of stocks’ market caps are similar to Columbia Property Trust Inc (NYSE:CXP)’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $363 million. Columbia Property Trust Inc (NYSE:CXP) is even less popular than Enstar Group Ltd. (NASDAQ:ESGR) and the funds from our database amassed stakes worth $238 million in aggregate at the end of September. Considering that hedge funds aren’t fond of this stock, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock.