Is HTA A Good Stock To Buy Now?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Healthcare Trust Of America Inc (NYSE:HTA).

Is HTA a good stock to buy now? Investors who are in the know were in a bullish mood. The number of long hedge fund positions moved up by 3 lately. Healthcare Trust Of America Inc (NYSE:HTA) was in 19 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 20. Our calculations also showed that HTA 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). There were 16 hedge funds in our database with HTA positions at the end of the second quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Dmitry Balyasny of Balyasny Asset Managemnet

Dmitry Balyasny of Balyasny Asset 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. With all of this in mind we’re going to review the key hedge fund action regarding Healthcare Trust Of America Inc (NYSE:HTA).

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

Heading into the fourth quarter of 2020, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 19% from the previous quarter. The graph below displays the number of hedge funds with bullish position in HTA over the last 21 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 Healthcare Trust Of America Inc (NYSE:HTA) was held by Citadel Investment Group, which reported holding $33.1 million worth of stock at the end of September. It was followed by Millennium Management with a $17.4 million position. Other investors bullish on the company included Carlson Capital, Alyeska Investment Group, and Gillson Capital. In terms of the portfolio weights assigned to each position Hill Winds Capital allocated the biggest weight to Healthcare Trust Of America Inc (NYSE:HTA), around 3.1% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, setting aside 0.95 percent of its 13F equity portfolio to HTA.

As industrywide interest jumped, key money managers have been driving this bullishness. Alyeska Investment Group, managed by Anand Parekh, initiated the most valuable position in Healthcare Trust Of America Inc (NYSE:HTA). Alyeska Investment Group had $7.8 million invested in the company at the end of the quarter. Daniel Johnson’s Gillson Capital also initiated a $6.5 million position during the quarter. The other funds with new positions in the stock are Renaissance Technologies, Steve Cohen’s Point72 Asset Management, and Dmitry Balyasny’s Balyasny Asset Management.

Let’s go over hedge fund activity in other stocks similar to Healthcare Trust Of America Inc (NYSE:HTA). We will take a look at First American Financial Corp (NYSE:FAF), Companhia de Saneamento Básico do Estado de São Paulo – SABESP (NYSE:SBS), Lumentum Holdings Inc (NASDAQ:LITE), Rexford Industrial Realty Inc (NYSE:REXR), TopBuild Corp (NYSE:BLD), BigCommerce Holdings, Inc. (NASDAQ:BIGC), and TIM Participacoes SA (NYSE:TSU). This group of stocks’ market values are closest to HTA’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FAF 42 712335 -2
SBS 11 197637 1
LITE 40 501941 -2
REXR 12 46806 -12
BLD 21 124114 -9
BIGC 18 357375 18
TSU 13 99011 -2
Average 22.4 291317 -1.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.4 hedge funds with bullish positions and the average amount invested in these stocks was $291 million. That figure was $100 million in HTA’s case. First American Financial Corp (NYSE:FAF) is the most popular stock in this table. On the other hand Companhia de Saneamento Básico do Estado de São Paulo – SABESP (NYSE:SBS) is the least popular one with only 11 bullish hedge fund positions. Healthcare Trust Of America Inc (NYSE:HTA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HTA is 49.4. 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 negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 30.7% in 2020 through December 14th and surpassed the market again by 15.8 percentage points. Unfortunately HTA wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); HTA investors were disappointed as the stock returned 1.9% since the end of September (through 12/14) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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