Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Brookfield Property Partners LP (NYSE:BPY), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Brookfield Property Partners LP (NYSE:BPY) investors should be aware of an increase in enthusiasm from smart money recently. Brookfield Property Partners LP (NYSE:BPY) was in 8 hedge funds’ portfolios at the end of September. The all time high for this statistics is 11. There were 6 hedge funds in our database with BPY positions at the end of the second quarter. Our calculations also showed that BPY isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
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 monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let’s take a peek at the key hedge fund action regarding Brookfield Property Partners LP (NYSE:BPY).
How are hedge funds trading Brookfield Property Partners LP (NYSE:BPY)?
Heading into the fourth quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the previous quarter. By comparison, 8 hedge funds held shares or bullish call options in BPY a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
The largest stake in Brookfield Property Partners LP (NYSE:BPY) was held by Forward Management, which reported holding $7.1 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $5.5 million position. Other investors bullish on the company included Citadel Investment Group, Renaissance Technologies, and EJF Capital. In terms of the portfolio weights assigned to each position Forward Management allocated the biggest weight to Brookfield Property Partners LP (NYSE:BPY), around 1.17% of its 13F portfolio. EJF Capital is also relatively very bullish on the stock, earmarking 0.17 percent of its 13F equity portfolio to BPY.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Renaissance Technologies, assembled the most valuable position in Brookfield Property Partners LP (NYSE:BPY). Renaissance Technologies had $2.4 million invested in the company at the end of the quarter. Emanuel J. Friedman’s EJF Capital also initiated a $2.1 million position during the quarter. The only other fund with a brand new BPY position is Renee Yao’s Neo Ivy Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Brookfield Property Partners LP (NYSE:BPY) but similarly valued. We will take a look at Regions Financial Corporation (NYSE:RF), E*TRADE Financial Corporation (NASDAQ:ETFC), Western Digital Corporation (NASDAQ:WDC), Principal Financial Group Inc (NYSE:PFG), Discovery Inc. (NASDAQ:DISCA), Sarepta Therapeutics Inc (NASDAQ:SRPT), and Suzano S.A. (NYSE:SUZ). This group of stocks’ market caps are closest to BPY’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 27.9 hedge funds with bullish positions and the average amount invested in these stocks was $478 million. That figure was $19 million in BPY’s case. E*TRADE Financial Corporation (NASDAQ:ETFC) is the most popular stock in this table. On the other hand Suzano S.A. (NYSE:SUZ) is the least popular one with only 4 bullish hedge fund positions. Brookfield Property Partners LP (NYSE:BPY) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BPY is 34.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on BPY as the stock returned 28.4% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.