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 866 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 March 31st. In this article we look at what those investors think of Vornado Realty Trust (NYSE:VNO).
Is VNO a good stock to buy? Vornado Realty Trust (NYSE:VNO) has seen an increase in support from the world’s most elite money managers in recent months. Vornado Realty Trust (NYSE:VNO) was in 25 hedge funds’ portfolios at the end of March. The all time high for this statistic is 37. There were 23 hedge funds in our database with VNO positions at the end of the fourth quarter. Our calculations also showed that VNO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now let’s take a look at the latest hedge fund action surrounding Vornado Realty Trust (NYSE:VNO).
Do Hedge Funds Think VNO Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in VNO over the last 23 quarters. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Among these funds, Redwood Capital Management held the most valuable stake in Vornado Realty Trust (NYSE:VNO), which was worth $49.9 million at the end of the fourth quarter. On the second spot was Balyasny Asset Management which amassed $43.4 million worth of shares. Renaissance Technologies, Marshall Wace LLP, and V3 Capital 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 Mountaineer Partners Management allocated the biggest weight to Vornado Realty Trust (NYSE:VNO), around 7.08% of its 13F portfolio. Hill Winds Capital is also relatively very bullish on the stock, dishing out 5.05 percent of its 13F equity portfolio to VNO.
Consequently, key money managers have jumped into Vornado Realty Trust (NYSE:VNO) headfirst. V3 Capital, managed by Charles Fitzgerald, initiated the most outsized position in Vornado Realty Trust (NYSE:VNO). V3 Capital had $12.1 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $7 million position during the quarter. The following funds were also among the new VNO investors: Daniel Johnson’s Gillson Capital, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and James A. Mitarotonda’s Barington Capital Group.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Vornado Realty Trust (NYSE:VNO) but similarly valued. These stocks are Mirati Therapeutics, Inc. (NASDAQ:MRTX), Carlisle Companies, Inc. (NYSE:CSL), Service Corporation International (NYSE:SCI), GSX Techedu Inc. (NYSE:GSX), Alaska Air Group, Inc. (NYSE:ALK), Assurant, Inc. (NYSE:AIZ), and Reinsurance Group of America Inc (NYSE:RGA). This group of stocks’ market caps are similar to VNO’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.6 hedge funds with bullish positions and the average amount invested in these stocks was $859 million. That figure was $216 million in VNO’s case. Mirati Therapeutics, Inc. (NASDAQ:MRTX) is the most popular stock in this table. On the other hand Carlisle Companies, Inc. (NYSE:CSL) is the least popular one with only 18 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 36.2. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through July 9th and surpassed the market again by 6.7 percentage points. Unfortunately VNO wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); VNO investors were disappointed as the stock returned 3.7% since the end of March (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.