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Ventas, Inc. (VTR): Hedge Fund Sentiment Unchanged

Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by elite investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.

Hedge fund interest in Ventas, Inc. (NYSE:VTR) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare VTR to other stocks including Dell Technologies Inc. (NASDAQ:DVMT), The Clorox Company (NYSE:CLX), and iQIYI, Inc. (NASDAQ:IQ) to get a better sense of its popularity.

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 flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Dmitry Balyasny

Let’s view the key hedge fund action encompassing Ventas, Inc. (NYSE:VTR).

Hedge fund activity in Ventas, Inc. (NYSE:VTR)

At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, no change from one quarter earlier. By comparison, 22 hedge funds held shares or bullish call options in VTR heading into this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with VTR Positions

More specifically, Renaissance Technologies was the largest shareholder of Ventas, Inc. (NYSE:VTR), with a stake worth $107.1 million reported as of the end of September. Trailing Renaissance Technologies was Millennium Management, which amassed a stake valued at $44.2 million. Adage Capital Management, AQR Capital Management, and Balyasny Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.

Because Ventas, Inc. (NYSE:VTR) has witnessed declining sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few money managers who sold off their entire stakes by the end of the third quarter. It’s worth mentioning that John Overdeck and David Siegel’s Two Sigma Advisors dropped the biggest position of all the hedgies followed by Insider Monkey, totaling an estimated $2.4 million in stock. Jeffrey Talpins’s fund, Element Capital Management, also sold off its stock, about $0.8 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks similar to Ventas, Inc. (NYSE:VTR). We will take a look at Dell Technologies Inc. (NYSE:DVMT), The Clorox Company (NYSE:CLX), iQIYI, Inc. (NASDAQ:IQ), and KB Financial Group, Inc. (NYSE:KB). This group of stocks’ market values are closest to VTR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DVMT 61 6285474 -5
CLX 22 999862 12
IQ 17 300499 0
KB 4 27227 -3
Average 26 1903266 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $1.90 billion. That figure was $225 million in VTR’s case. Dell Technologies Inc. (NYSE:DVMT) is the most popular stock in this table. On the other hand KB Financial Group, Inc. (NYSE:KB) is the least popular one with only 4 bullish hedge fund positions. Ventas, Inc. (NYSE:VTR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard DVMT might be a better candidate to consider a long position.

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

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