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Were Hedge Funds Right About Flocking Into CoreSite Realty Corp (COR) ?

We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article we look at what those investors think of CoreSite Realty Corp (NYSE:COR).

CoreSite Realty Corp (NYSE:COR) shareholders have witnessed an increase in hedge fund sentiment lately. COR was in 15 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 12 hedge funds in our database with COR holdings at the end of the previous quarter. Our calculations also showed that cor isn’t among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

FISHER ASSET MANAGEMENT

We’re going to take a gander at the new hedge fund action encompassing CoreSite Realty Corp (NYSE:COR).

What does the smart money think about CoreSite Realty Corp (NYSE:COR)?

At Q4’s end, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards COR over the last 14 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds With COR Positions

Among these funds, Renaissance Technologies held the most valuable stake in CoreSite Realty Corp (NYSE:COR), which was worth $83.7 million at the end of the third quarter. On the second spot was Millennium Management which amassed $35.3 million worth of shares. Moreover, Fisher Asset Management, Two Sigma Advisors, and GLG Partners were also bullish on CoreSite Realty Corp (NYSE:COR), allocating a large percentage of their portfolios to this stock.

As industrywide interest jumped, specific money managers have jumped into CoreSite Realty Corp (NYSE:COR) headfirst. Citadel Investment Group, managed by Ken Griffin, created the largest position in CoreSite Realty Corp (NYSE:COR). Citadel Investment Group had $2 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also initiated a $1.6 million position during the quarter. The other funds with new positions in the stock are Bruce Kovner’s Caxton Associates LP and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as CoreSite Realty Corp (NYSE:COR) but similarly valued. These stocks are Plains GP Holdings LP (NYSE:PAGP), Cimpress NV (NASDAQ:CMPR), FireEye Inc (NASDAQ:FEYE), and MasTec, Inc. (NYSE:MTZ). This group of stocks’ market values are closest to COR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PAGP 18 203184 -5
CMPR 18 616894 1
FEYE 28 306328 -1
MTZ 29 425138 -1
Average 23.25 387886 -1.5

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 $388 million. That figure was $181 million in COR’s case. MasTec, Inc. (NYSE:MTZ) is the most popular stock in this table. On the other hand Plains GP Holdings LP (NYSE:PAGP) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks CoreSite Realty Corp (NYSE:COR) is even less popular than PAGP. Hedge funds clearly dropped the ball on COR as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on COR as the stock returned 26% and outperformed the market by an even larger margin.

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

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