Is PSA Stock A Buy or Sell?

The Insider Monkey team has completed processing the quarterly 13F filings for the December 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 Public Storage (NYSE:PSA).

Is PSA stock a buy? Public Storage (NYSE:PSA) investors should be aware of an increase in enthusiasm from smart money of late. Public Storage (NYSE:PSA) was in 31 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 27. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 17 hedge funds in our database with PSA holdings at the end of September. Our calculations also showed that PSA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 124 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.

Ric Dillon Diamond Hill Capital

Ric Dillon of Diamond Hill Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this biotech stock. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 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. Keeping this in mind we’re going to check out the new hedge fund action regarding Public Storage (NYSE:PSA).

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

At the end of the fourth quarter, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 82% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PSA over the last 22 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is PSA A Good Stock To Buy?

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Diamond Hill Capital, managed by Ric Dillon, holds the largest position in Public Storage (NYSE:PSA). Diamond Hill Capital has a $179.6 million position in the stock, comprising 0.8% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, holding a $175.5 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include Cliff Asness’s AQR Capital Management, Paul Singer’s Elliott Investment Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Land & Buildings Investment Management allocated the biggest weight to Public Storage (NYSE:PSA), around 9.4% of its 13F portfolio. Soapstone Capital is also relatively very bullish on the stock, dishing out 6.48 percent of its 13F equity portfolio to PSA.

As one would reasonably expect, key hedge funds have jumped into Public Storage (NYSE:PSA) headfirst. Elliott Investment Management, managed by Paul Singer, established the most valuable position in Public Storage (NYSE:PSA). Elliott Investment Management had $132.8 million invested in the company at the end of the quarter. Jonathan Litt’s Land & Buildings Investment Management also made a $42.9 million investment in the stock during the quarter. The other funds with brand new PSA positions are Dmitry Balyasny’s Balyasny Asset Management, Gregg Moskowitz’s Interval Partners, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s also examine hedge fund activity in other stocks similar to Public Storage (NYSE:PSA). We will take a look at Match Group, Inc. (NASDAQ:MTCH), Rocket Companies, Inc. (NYSE:RKT), TE Connectivity Ltd. (NYSE:TEL), KLA Corporation (NASDAQ:KLAC), Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), L3Harris Technologies, Inc. (NASDAQ:LHX), and Synopsys, Inc. (NASDAQ:SNPS). This group of stocks’ market caps are closest to PSA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MTCH 72 3780895 11
RKT 16 222897 -6
TEL 39 2164724 6
KLAC 36 925910 3
ERIC 20 210745 -3
LHX 37 890624 -5
SNPS 40 1685180 8
Average 37.1 1411568 2

View table here if you experience formatting issues.

As you can see these stocks had an average of 37.1 hedge funds with bullish positions and the average amount invested in these stocks was $1412 million. That figure was $1038 million in PSA’s case. Match Group, Inc. (NASDAQ:MTCH) is the most popular stock in this table. On the other hand Rocket Companies, Inc. (NYSE:RKT) is the least popular one with only 16 bullish hedge fund positions. Public Storage (NYSE:PSA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PSA is 53.4. 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 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 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. A small number of hedge funds were also right about betting on PSA as the stock returned 13.9% since the end of the fourth quarter (through 4/12) and outperformed the market by an even larger margin.

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