Is WRI A Good Stock To Buy Now?

While the market driven by short-term sentiment influenced by the accomodative interest rate environment in the US, virus news and stimulus talks, many smart money investors are starting to get cautious towards the current bull run since March and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 30,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Weingarten Realty Investors (NYSE:WRI).

Is WRI a good stock to buy now? Weingarten Realty Investors (NYSE:WRI) shareholders have witnessed a decrease in support from the world’s most elite money managers lately. Weingarten Realty Investors (NYSE:WRI) was in 14 hedge funds’ portfolios at the end of September. The all time high for this statistic is 21. Our calculations also showed that WRI 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.

Today there are several tools stock traders have at their disposal to size up publicly traded companies. Two of the most useful tools are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the top money managers can outperform the market by a significant amount (see the details here).

Clint Carlson of Carlson Capital

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 analyze the new hedge fund action regarding Weingarten Realty Investors (NYSE:WRI).

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

At the end of September, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -26% from one quarter earlier. By comparison, 21 hedge funds held shares or bullish call options in WRI a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Citadel Investment Group held the most valuable stake in Weingarten Realty Investors (NYSE:WRI), which was worth $24.3 million at the end of the third quarter. On the second spot was Carlson Capital which amassed $23.6 million worth of shares. Millennium Management, Gillson Capital, and Balyasny Asset Management 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 Gillson Capital allocated the biggest weight to Weingarten Realty Investors (NYSE:WRI), around 2.22% of its 13F portfolio. Carlson Capital is also relatively very bullish on the stock, designating 0.69 percent of its 13F equity portfolio to WRI.

Due to the fact that Weingarten Realty Investors (NYSE:WRI) has experienced falling interest from the aggregate hedge fund industry, we can see that there was a specific group of hedgies who sold off their full holdings by the end of the third quarter. It’s worth mentioning that Jonathan Litt’s Land & Buildings Investment Management said goodbye to the largest stake of the 750 funds watched by Insider Monkey, valued at about $14.2 million in stock, and Greg Poole’s Echo Street Capital Management was right behind this move, as the fund dropped about $9.7 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 5 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Weingarten Realty Investors (NYSE:WRI) but similarly valued. We will take a look at Kirby Corporation (NYSE:KEX), Alcoa Corporation (NYSE:AA), Utz Brands Inc (NYSE:UTZ), Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY), Federated Hermes, Inc. (NYSE:FHI), Guangshen Railway Co. Ltd (NYSE:GSH), and PagerDuty, Inc. (NYSE:PD). This group of stocks’ market values resemble WRI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
KEX 34 423901 14
AA 33 415610 0
UTZ 15 166197 -4
HRMY 10 214625 10
FHI 29 167641 -1
GSH 1 95 0
PD 28 138455 -2
Average 21.4 218075 2.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.4 hedge funds with bullish positions and the average amount invested in these stocks was $218 million. That figure was $121 million in WRI’s case. Kirby Corporation (NYSE:KEX) is the most popular stock in this table. On the other hand Guangshen Railway Co. Ltd (NYSE:GSH) is the least popular one with only 1 bullish hedge fund positions. Weingarten Realty Investors (NYSE:WRI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WRI is 39.7. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on WRI as the stock returned 30.6% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.

Follow Weingarten Realty Investors (NYSE:WRI)

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