In this article we will take a look at whether hedge funds think The Macerich Company (NYSE:MAC) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
The Macerich Company (NYSE:MAC) investors should pay attention to a decrease in hedge fund interest of late. Our calculations also showed that MAC 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.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. 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 let’s take a peek at the recent hedge fund action surrounding The Macerich Company (NYSE:MAC).
How are hedge funds trading The Macerich Company (NYSE:MAC)?
At Q1’s end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -19% from the previous quarter. By comparison, 22 hedge funds held shares or bullish call options in MAC a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Arrowstreet Capital held the most valuable stake in The Macerich Company (NYSE:MAC), which was worth $8.8 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $8.5 million worth of shares. Citadel Investment Group, Redwood Capital Management, 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 Prentice Capital Management allocated the biggest weight to The Macerich Company (NYSE:MAC), around 1.06% of its 13F portfolio. Redwood Capital Management is also relatively very bullish on the stock, earmarking 0.57 percent of its 13F equity portfolio to MAC.
Seeing as The Macerich Company (NYSE:MAC) has witnessed declining sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of funds who were dropping their positions entirely by the end of the first quarter. At the top of the heap, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners dumped the biggest stake of the 750 funds watched by Insider Monkey, worth an estimated $4.4 million in stock. James Thomas Berylson’s fund, Berylson Capital Partners, also cut its stock, about $3 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 5 funds by the end of the first quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as The Macerich Company (NYSE:MAC) but similarly valued. We will take a look at Kite Realty Group Trust (NYSE:KRG), NMI Holdings Inc (NASDAQ:NMIH), Jack in the Box Inc. (NASDAQ:JACK), and Central European Media Enterprises Ltd. (NASDAQ:CETV). All of these stocks’ market caps are similar to MAC’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 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $82 million. That figure was $41 million in MAC’s case. Jack in the Box Inc. (NASDAQ:JACK) is the most popular stock in this table. On the other hand Kite Realty Group Trust (NYSE:KRG) is the least popular one with only 8 bullish hedge fund positions. The Macerich Company (NYSE:MAC) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th but still beat the market by 14.8 percentage points. Hedge funds were also right about betting on MAC as the stock returned 67% in Q2 (through June 17th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.