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 The Macerich Company (NYSE:MAC) based on those filings.
Is MAC a good stock to buy now? The Macerich Company (NYSE:MAC) investors should be aware of a decrease in activity from the world’s largest hedge funds of late. The Macerich Company (NYSE:MAC) was in 18 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 38. Our calculations also showed that MAC 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 financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Philippe Laffont of Coatue 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. Now let’s take a glance at the recent hedge fund action regarding The Macerich Company (NYSE:MAC).
Do Hedge Funds Think MAC Is A Good Stock To Buy Now?
At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards MAC over the last 21 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the largest position in The Macerich Company (NYSE:MAC). Arrowstreet Capital has a $9.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Arrowstreet Capital’s heels is Renaissance Technologies, holding a $6.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers with similar optimism encompass Ken Griffin’s Citadel Investment Group, John Khoury’s Long Pond Capital and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Third Avenue Management allocated the biggest weight to The Macerich Company (NYSE:MAC), around 0.35% of its 13F portfolio. Forward Management is also relatively very bullish on the stock, setting aside 0.24 percent of its 13F equity portfolio to MAC.
Seeing as The Macerich Company (NYSE:MAC) has witnessed bearish sentiment from hedge fund managers, it’s easy to see that there lies a certain “tier” of fund managers who sold off their full holdings in the third quarter. It’s worth mentioning that John Overdeck and David Siegel’s Two Sigma Advisors cut the largest stake of the “upper crust” of funds watched by Insider Monkey, valued at an estimated $1.1 million in stock. D. E. Shaw’s fund, D E Shaw, also sold off its stock, about $0.6 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to The Macerich Company (NYSE:MAC). These stocks are DRDGOLD Ltd. (NYSE:DRD), Castle Biosciences, Inc. (NASDAQ:CSTL), Suburban Propane Partners LP (NYSE:SPH), DiamondRock Hospitality Company (NYSE:DRH), Translate Bio, Inc. (NASDAQ:TBIO), GenMark Diagnostics, Inc (NASDAQ:GNMK), and The Buckle, Inc. (NYSE:BKE). This group of stocks’ market values resemble MAC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DRD | 9 | 32197 | 7 |
| CSTL | 18 | 89583 | 0 |
| SPH | 3 | 11375 | 1 |
| DRH | 14 | 63389 | -2 |
| TBIO | 23 | 342432 | -3 |
| GNMK | 25 | 297839 | 1 |
| BKE | 18 | 56050 | 1 |
| Average | 15.7 | 127552 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.7 hedge funds with bullish positions and the average amount invested in these stocks was $128 million. That figure was $43 million in MAC’s case. GenMark Diagnostics, Inc (NASDAQ:GNMK) is the most popular stock in this table. On the other hand Suburban Propane Partners LP (NYSE:SPH) is the least popular one with only 3 bullish hedge fund positions. The Macerich Company (NYSE:MAC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MAC is 51.3. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on MAC as the stock returned 65.7% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
