Regency Centers Corp (REG): Hedge Funds Are Nibbling On

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Regency Centers Corp (NASDAQ:REG).

Regency Centers Corp (NASDAQ:REG) has experienced an increase in hedge fund sentiment in recent months. Our calculations also showed that REG isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.

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 58 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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Bruce Kovner, Caxton Associates LP

Bruce Kovner of Caxton Associates LP

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a peek at the new hedge fund action regarding Regency Centers Corp (NASDAQ:REG).

What have hedge funds been doing with Regency Centers Corp (NASDAQ:REG)?

At Q1’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in REG over the last 18 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).

The largest stake in Regency Centers Corp (NASDAQ:REG) was held by Citadel Investment Group, which reported holding $88.4 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $42.2 million position. Other investors bullish on the company included D E Shaw, Adage Capital Management, and Millennium Management. In terms of the portfolio weights assigned to each position Hill Winds Capital allocated the biggest weight to Regency Centers Corp (NASDAQ:REG), around 3.67% of its 13F portfolio. Neo Ivy Capital is also relatively very bullish on the stock, earmarking 0.54 percent of its 13F equity portfolio to REG.

Consequently, some big names have been driving this bullishness. Millennium Management, managed by Israel Englander, established the biggest position in Regency Centers Corp (NASDAQ:REG). Millennium Management had $6.9 million invested in the company at the end of the quarter. Joe DiMenna’s ZWEIG DIMENNA PARTNERS also initiated a $2.3 million position during the quarter. The other funds with brand new REG positions are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Mike Vranos’s Ellington, and Bruce Kovner’s Caxton Associates LP.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Regency Centers Corp (NASDAQ:REG) but similarly valued. We will take a look at AptarGroup, Inc. (NYSE:ATR), PagSeguro Digital Ltd. (NYSE:PAGS), Eastman Chemical Company (NYSE:EMN), and American Financial Group, Inc. (NYSE:AFG). This group of stocks’ market values are similar to REG’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ATR 20 156311 -5
PAGS 20 490881 -1
EMN 29 233593 -3
AFG 24 200932 -1
Average 23.25 270429 -2.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.25 hedge funds with bullish positions and the average amount invested in these stocks was $270 million. That figure was $167 million in REG’s case. Eastman Chemical Company (NYSE:EMN) is the most popular stock in this table. On the other hand AptarGroup, Inc. (NYSE:ATR) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks Regency Centers Corp (NASDAQ:REG) is even less popular than ATR. Hedge funds dodged a bullet by taking a bearish stance towards REG. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but managed to beat the market by 15.9 percentage points. Unfortunately REG wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); REG investors were disappointed as the stock returned 20.1% during the second quarter (through June 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.

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