Is Ventas, Inc. (VTR) A Good Stock To Buy?

Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Ventas, Inc. (NYSE:VTR) ? The smart money sentiment can provide an answer to this question.

Ventas, Inc. (NYSE:VTR)investors should pay attention to an increase in hedge fund sentiment in recent months. There were 15 hedge funds in our database with VTR holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as CRH PLC (ADR) (NYSE:CRH), DISH Network Corp. (NASDAQ:DISH), and VMware, Inc. (NYSE:VMW) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

With all of this in mind, we’re going to analyze the fresh action surrounding Ventas, Inc. (NYSE:VTR).

How have hedgies been trading Ventas, Inc. (NYSE:VTR)?

At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from one quarter earlier. On the other hand, there were a total of 13 hedge funds with a bullish position in VTR at the beginning of this year. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jeffrey Furber’s AEW Capital Management has the most valuable position in Ventas, Inc. (NYSE:VTR), worth close to $228.2 million, accounting for 4.7% of its total 13F portfolio. On AEW Capital Management’s heels is Ken Griffin of Citadel Investment Group, with a $60.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism consist of Cliff Asness’s AQR Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Matthew Hulsizer’s PEAK6 Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

As aggregate interest increased, key money managers have been driving this bullishness. Balyasny Asset Management, led by Dmitry Balyasny, initiated the most valuable position in Ventas, Inc. (NYSE:VTR). Balyasny Asset Management had $11.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $9.5 million position during the quarter. The other funds with brand new VTR positions are Ken Griffin’s Citadel Investment Group, Greg Poole’s Echo Street Capital Management, and Matthew Tewksbury’s Stevens Capital Management.

Let’s now review hedge fund activity in other stocks similar to Ventas, Inc. (NYSE:VTR). These stocks are CRH PLC (ADR) (NYSE:CRH), DISH Network Corp. (NASDAQ:DISH), VMware, Inc. (NYSE:VMW), and The Hershey Company (NYSE:HSY). All of these stocks’ market caps match VTR’s market cap.

As you can see these stocks had an average of 35.5 hedge funds with bullish positions and the average amount invested in these stocks was $1390 million. That figure was $442 million in VTR’s case. DISH Network Corp. (NASDAQ:DISH) is the most popular stock in this table. On the other hand CRH PLC (ADR) (NYSE:CRH) is the least popular one with only 8 bullish hedge fund positions. Ventas, Inc. (NYSE:VTR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard DISH might be a better candidate to consider taking a long position in.