The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded LTC Properties Inc (NYSE:LTC) based on those filings.
Is LTC a good stock to buy now? LTC Properties Inc (NYSE:LTC) has seen a decrease in activity from the world’s largest hedge funds in recent months. LTC Properties Inc (NYSE:LTC) was in 9 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 15. Our calculations also showed that LTC 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are a lot of metrics shareholders have at their disposal to appraise stocks. Some of the most innovative metrics are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform the broader indices by a very impressive margin (see the details here).
Noam Gottesman of GLG Partners
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. Now let’s view the recent hedge fund action regarding LTC Properties Inc (NYSE:LTC).
Do Hedge Funds Think LTC Is A Good Stock To Buy Now?
At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -40% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards LTC over the last 21 quarters. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
The largest stake in LTC Properties Inc (NYSE:LTC) was held by Winton Capital Management, which reported holding $3.1 million worth of stock at the end of September. It was followed by Two Sigma Advisors with a $1.8 million position. Other investors bullish on the company included Citadel Investment Group, Citadel Investment Group, and GLG Partners. In terms of the portfolio weights assigned to each position Quantinno Capital allocated the biggest weight to LTC Properties Inc (NYSE:LTC), around 0.38% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, earmarking 0.1 percent of its 13F equity portfolio to LTC.
Because LTC Properties Inc (NYSE:LTC) has experienced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedge funds that decided to sell off their full holdings in the third quarter. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the largest investment of the 750 funds tracked by Insider Monkey, totaling an estimated $2.2 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund dumped about $0.9 million worth. These transactions are interesting, as total hedge fund interest was cut by 6 funds in the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as LTC Properties Inc (NYSE:LTC) but similarly valued. We will take a look at Intercept Pharmaceuticals Inc (NASDAQ:ICPT), Ebang International Holdings Inc. (NASDAQ:EBON), WSFS Financial Corporation (NASDAQ:WSFS), Knowles Corp (NYSE:KN), MacroGenics Inc (NASDAQ:MGNX), James River Group Holdings Ltd (NASDAQ:JRVR), and Trustmark Corp (NASDAQ:TRMK). This group of stocks’ market values are closest to LTC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ICPT | 20 | 166374 | -2 |
| EBON | 1 | 1584 | 1 |
| WSFS | 12 | 108404 | -5 |
| KN | 23 | 218625 | -1 |
| MGNX | 24 | 478699 | 3 |
| JRVR | 14 | 105806 | 4 |
| TRMK | 18 | 30182 | 1 |
| Average | 16 | 158525 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $159 million. That figure was $10 million in LTC’s case. MacroGenics Inc (NASDAQ:MGNX) is the most popular stock in this table. On the other hand Ebang International Holdings Inc. (NASDAQ:EBON) is the least popular one with only 1 bullish hedge fund positions. LTC Properties Inc (NYSE:LTC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LTC is 34.4. 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. 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 32.9% in 2020 through December 8th and beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on LTC, though not to the same extent, as the stock returned 11.3% since the end of Q3 (through December 8th) and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.
