Is Howard Hughes Corporation (HHC) A Great Investment Choice?

Rhizome Partners, an investment management firm, published its first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 11.5% was recorded by the fund, outperforming the S&P 500 Index that delivered a +6.2% return and the FTSE NAREIT All Equity REIT Total Return Index that was up by 8.3% for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Rhizome Partners, in its Q1 2021 investor letter, mentioned The Howard Hughes Corporation (NYSE: HHC), and shared their insights on the company. The Howard Hughes Corporation is a Dallas, Texas-based real estate company that currently has a $5.6 billion market capitalization. Since the beginning of the year, HHC delivered a 30.63% return, extending its 12-month gains to 117.67%. As of May 19, 2021, the stock closed at $103.11 per share.

Here is what Rhizome Partners has to say about The Howard Hughes Corporation in its Q1 2021 investor letter:

Howard Hughes experienced strong gains during the quarter. The company’s Hawaii condo sales continue to improve. We believe that vaccinations and a lack of entertainment competition may make the Seaport in NYC a favored destination for New Yorkers in the summer of 2021. Narratives often drive stock prices. In the last few years, Howard Hughes has been link to 1) a real estate compounder 2) an oil and gas crisis 3) an event driven trade via strategic initiative 4) a pandemic and 5) a millennial homebuying and net migration story. The company has continuously developed and improved their real estate holdings while the market mostly ignored the growth in NAV. Instead, narratives drove the stock price rather than NAV or the growth in NAV over time. Wall Street is currently enamored with everything related to homebuying and net migration stories and Howard Hughes provides excellent exposure to both themes. Our job is to discover companies trading at large discounts to NAV at the start. Equally important, our job is to assess the current narrative and its trajectory and adjust our positions accordingly. We believe the current favorable narrative can last for a while.”

Real Estate, Construction


Our calculations show that The Howard Hughes Corporation (NYSE: HHC) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, The Howard Hughes Corporation (NYSE: HHC) was in 27 hedge fund portfolios, compared to 31 funds in the third quarter. HHC delivered a 3.12% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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 innovative stocks to buy to pick the next Tesla that will deliver a 10x return. 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:

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