The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 817 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, about a month before the elections. In this article we look at what those investors think of Vornado Realty Trust (NYSE:VNO).
Is Vornado Realty Trust (NYSE:VNO) a sound investment right now? The best stock pickers were buying. The number of bullish hedge fund bets moved up by 3 recently. Vornado Realty Trust (NYSE:VNO) was in 20 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 37. Our calculations also showed that VNO 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 17 hedge funds in our database with VNO holdings at the end of June.
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.
Martin Whitman of Third Avenue 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 we’re going to review the key hedge fund action encompassing Vornado Realty Trust (NYSE:VNO).
Do Hedge Funds Think VNO Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards VNO over the last 21 quarters. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
More specifically, Redwood Capital Management was the largest shareholder of Vornado Realty Trust (NYSE:VNO), with a stake worth $47.3 million reported as of the end of September. Trailing Redwood Capital Management was Third Avenue Management, which amassed a stake valued at $32.2 million. Maple Rock Capital, Granite Point Capital, and Waterfront Capital Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Maple Rock Capital allocated the biggest weight to Vornado Realty Trust (NYSE:VNO), around 5.42% of its 13F portfolio. Third Avenue Management is also relatively very bullish on the stock, setting aside 4.47 percent of its 13F equity portfolio to VNO.
Now, key hedge funds were leading the bulls’ herd. Waterfront Capital Partners, managed by Eduardo Abush, established the biggest position in Vornado Realty Trust (NYSE:VNO). Waterfront Capital Partners had $16.1 million invested in the company at the end of the quarter. Emanuel J. Friedman’s EJF Capital also initiated a $6.7 million position during the quarter. The following funds were also among the new VNO investors: Steven Tananbaum’s GoldenTree Asset Management, Minhua Zhang’s Weld Capital Management, and Michael Gelband’s ExodusPoint Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Vornado Realty Trust (NYSE:VNO) but similarly valued. We will take a look at Kingsoft Cloud Holdings Limited (NASDAQ:KC), Reynolds Consumer Products Inc. (NASDAQ:REYN), Berry Global Group Inc (NYSE:BERY), Bunge Limited (NYSE:BG), Autoliv Inc. (NYSE:ALV), The Gap Inc. (NYSE:GPS), and SolarWinds Corporation (NYSE:SWI). All of these stocks’ market caps match VNO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KC | 29 | 161641 | 9 |
| REYN | 18 | 239807 | 1 |
| BERY | 43 | 1263030 | 3 |
| BG | 41 | 700956 | 4 |
| ALV | 19 | 629708 | -3 |
| GPS | 35 | 634886 | -3 |
| SWI | 15 | 2718441 | -4 |
| Average | 28.6 | 906924 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.6 hedge funds with bullish positions and the average amount invested in these stocks was $907 million. That figure was $142 million in VNO’s case. Berry Global Group Inc (NYSE:BERY) is the most popular stock in this table. On the other hand SolarWinds Corporation (NYSE:SWI) is the least popular one with only 15 bullish hedge fund positions. Vornado Realty Trust (NYSE:VNO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for VNO is 33.1. 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. A small number of hedge funds were also right about betting on VNO as the stock returned 14.9% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
