What Do Hedge Funds Think of Brandywine Realty Trust (BDN)?

The worries about the economic slowdown in China and the ongoing uncertainty about the path of interest-rate increases triggered several waves of equity sell-offs during the third quarter. Of course, most hedge funds and other asset managers had to stomach substantial losses during the bloody three-month period, which might have caused some to consider fleeing the U.S. equity markets. Interestingly, smaller-cap stocks registered higher losses than large-capitalization stocks during the September quarter, suggesting that institutional investors heavily discarded seemingly riskier equities amid high uncertainty and turmoil. In fact, the Russell 2000 Index lost 11.9% in the third quarter, while the Standard and Poor’s 500 benchmark declined a mere 6.4%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Brandywine Realty Trust (NYSE:BDN).

Is Brandywine Realty Trust (NYSE:BDN) the right pick for your portfolio? Hedge funds are in an optimistic mood. The number of long hedge fund bets inched up by 1 recently. BDN was in 17 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with BDN holdings at the end of the previous quarter. At the end of this article we will also compare BDN to other stocks including The Geo Group, Inc. (NYSE:GEO), DiamondRock Hospitality Company (NYSE:DRH), and Euronav NV Ordinary Shares (NYSE:EURN) to get a better sense of its popularity.

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In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of years past. While there are greater than an 8000 funds with their doors open at present, Our experts choose to focus on the elite of this club, around 700 funds. These money managers watch over bulk of the smart money’s total asset base, and by keeping an eye on their inimitable stock picks, Insider Monkey has deciphered various investment strategies that have historically exceeded the market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per year for a decade in their back tests.

With all of this in mind, we’re going to take a glance at the key action encompassing Brandywine Realty Trust (NYSE:BDN).

What have hedge funds been doing with Brandywine Realty Trust (NYSE:BDN)?

Heading into Q4, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Millennium Management, managed by Israel Englander, holds the biggest position in Brandywine Realty Trust (NYSE:BDN). Millennium Management has a $42.2 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by John Khoury of Long Pond Capital, with a $36.4 million position; 1.6% of its 13F portfolio is allocated to the company. Remaining professional money managers that are bullish include Dmitry Balyasny’s Balyasny Asset Management, Jim Simons’s Renaissance Technologies and Eduardo Abush’s Waterfront Capital Partners.

As industrywide interest jumped, some big names were breaking ground themselves. Waterfront Capital Partners, managed by Eduardo Abush, created the biggest position in Brandywine Realty Trust (NYSE:BDN). Waterfront Capital Partners had $10.5 million invested in the company at the end of the quarter. Chao Ku’s Nine Chapters Capital Management also made a $2.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Millennium Management Subsidiary’s Decade Capital Management, Paul Tudor Jones’s Tudor Investment Corp, and Thomas Bailard’s Bailard Inc.

Let’s check out hedge fund activity in other stocks similar to Brandywine Realty Trust (NYSE:BDN). We will take a look at The Geo Group, Inc. (NYSE:GEO), DiamondRock Hospitality Company (NYSE:DRH), Euronav NV Ordinary Shares (NYSE:EURN), and QEP Resources Inc (NYSE:QEP). This group of stocks’ market valuations are similar to BDN’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GEO 16 72961 -2
DRH 13 30147 -1
EURN 21 409682 2
QEP 21 341425 -5

As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $214 million. That figure was $153 million in BDN’s case. Euronav NV Ordinary Shares (NYSE:EURN) is the most popular stock in this table. On the other hand DiamondRock Hospitality Company (NYSE:DRH) is the least popular one with only 13 bullish hedge fund positions. Brandywine Realty Trust (NYSE:BDN) 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 EURN might be a better candidate to consider a long position.