The government requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30. We at Insider Monkey have made an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Highwoods Properties Inc (NYSE:HIW) based on those filings.
Is Highwoods Properties Inc (NYSE:HIW) an exceptional investment now? The best stock pickers are reducing their bets on the stock. The number of long hedge fund positions fell by 1 lately. Our calculations also showed that hiw isn’t among the 30 most popular stocks among hedge funds. HIW was in 14 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with HIW positions at the end of the previous quarter.
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 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to review the recent hedge fund action surrounding Highwoods Properties Inc (NYSE:HIW).
How are hedge funds trading Highwoods Properties Inc (NYSE:HIW)?
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HIW over the last 13 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Highwoods Properties Inc (NYSE:HIW) was held by Renaissance Technologies, which reported holding $87.6 million worth of stock at the end of September. It was followed by Millennium Management with a $33.8 million position. Other investors bullish on the company included Citadel Investment Group, Echo Street Capital Management, and Balyasny Asset Management.
Judging by the fact that Highwoods Properties Inc (NYSE:HIW) has experienced bearish sentiment from hedge fund managers, logic holds that there lies a certain “tier” of funds that elected to cut their positions entirely by the end of the third quarter. At the top of the heap, Eduardo Abush’s Waterfront Capital Partners cut the biggest investment of the “upper crust” of funds followed by Insider Monkey, valued at an estimated $7.1 million in stock. Richard Driehaus’s fund, Driehaus Capital, also said goodbye to its stock, about $2.4 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 1 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Highwoods Properties Inc (NYSE:HIW). These stocks are Algonquin Power & Utilities Corp. (NYSE:AQN), Bank OZK (NASDAQ:OZK), GW Pharmaceuticals plc (NASDAQ:GWPH), and Zscaler, Inc. (NASDAQ:ZS). All of these stocks’ market caps resemble HIW’s market cap.
|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 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $256 million. That figure was $189 million in HIW’s case. Zscaler, Inc. (NASDAQ:ZS) is the most popular stock in this table. On the other hand Algonquin Power & Utilities Corp. (NYSE:AQN) is the least popular one with only 6 bullish hedge fund positions. Highwoods Properties Inc (NYSE:HIW) 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. In this regard ZS might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.