Is HR Stock A Buy or Sell?

In this article we are going to use hedge fund sentiment as a tool and determine whether Healthcare Realty Trust Inc (NYSE:HR) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Is HR stock a buy? Healthcare Realty Trust Inc (NYSE:HR) was in 23 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic was previously 22. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. HR investors should pay attention to an increase in enthusiasm from smart money recently. There were 18 hedge funds in our database with HR holdings at the end of September. Our calculations also showed that HR isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

To most market participants, hedge funds are perceived as worthless, old financial vehicles of the past. While there are greater than 8000 funds in operation at the moment, We hone in on the crème de la crème of this group, about 850 funds. These investment experts orchestrate the lion’s share of the hedge fund industry’s total asset base, and by watching their top investments, Insider Monkey has revealed a number of investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 197% since March 2017 (through March 2021) and beat the S&P 500 Index by 124 percentage points. You can download a sample issue of this newsletter on our website .

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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. Now we’re going to take a look at the recent hedge fund action surrounding Healthcare Realty Trust Inc (NYSE:HR).

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

At the end of December, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 28% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HR over the last 22 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Healthcare Realty Trust Inc (NYSE:HR) was held by GLG Partners, which reported holding $50.5 million worth of stock at the end of December. It was followed by Waterfront Capital Partners with a $29.6 million position. Other investors bullish on the company included Carlson Capital, D E Shaw, and Balyasny Asset Management. In terms of the portfolio weights assigned to each position Waterfront Capital Partners allocated the biggest weight to Healthcare Realty Trust Inc (NYSE:HR), around 2.9% of its 13F portfolio. Hill Winds Capital is also relatively very bullish on the stock, designating 2.51 percent of its 13F equity portfolio to HR.

As industrywide interest jumped, specific money managers were breaking ground themselves. GLG Partners, managed by Noam Gottesman, assembled the most valuable position in Healthcare Realty Trust Inc (NYSE:HR). GLG Partners had $50.5 million invested in the company at the end of the quarter. Daniel Johnson’s Gillson Capital also made a $5.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Parvinder Thiara’s Athanor Capital, and Greg Eisner’s Engineers Gate Manager.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Healthcare Realty Trust Inc (NYSE:HR) but similarly valued. We will take a look at Blackstone Mortgage Trust Inc (NYSE:BXMT), Arvinas, Inc. (NASDAQ:ARVN), Rayonier Inc. (NYSE:RYN), Selective Insurance Group, Inc. (NASDAQ:SIGI), Terreno Realty Corporation (NYSE:TRNO), UniFirst Corp (NYSE:UNF), and Vicor Corp (NASDAQ:VICR). This group of stocks’ market valuations are closest to HR’s market valuation.

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As you can see these stocks had an average of 17.7 hedge funds with bullish positions and the average amount invested in these stocks was $222 million. That figure was $173 million in HR’s case. Arvinas, Inc. (NASDAQ:ARVN) is the most popular stock in this table. On the other hand Terreno Realty Corporation (NYSE:TRNO) is the least popular one with only 9 bullish hedge fund positions. Healthcare Realty Trust Inc (NYSE:HR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HR is 68. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and beat the market again by 0.9 percentage points. Unfortunately HR wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on HR were disappointed as the stock returned 8% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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