The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Healthcare Realty Trust Inc (NYSE:HR).
Healthcare Realty Trust Inc (NYSE:HR) was in 20 hedge funds’ portfolios at the end of March. The all time high for this statistic is 23. HR investors should pay attention to a decrease in hedge fund interest recently. There were 23 hedge funds in our database with HR positions at the end of the fourth quarter. Our calculations also showed that HR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 homepage. With all of this in mind let’s check out the key hedge fund action regarding Healthcare Realty Trust Inc (NYSE:HR).
Do Hedge Funds Think HR Is A Good Stock To Buy Now?
At Q1’s end, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from the fourth quarter of 2020. On the other hand, there were a total of 11 hedge funds with a bullish position in HR a year ago. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Among these funds, GLG Partners held the most valuable stake in Healthcare Realty Trust Inc (NYSE:HR), which was worth $46.7 million at the end of the fourth quarter. On the second spot was Millennium Management which amassed $21.7 million worth of shares. AQR Capital Management, Carlson Capital, and Impax 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 Hill Winds Capital allocated the biggest weight to Healthcare Realty Trust Inc (NYSE:HR), around 1% of its 13F portfolio. Carlson Capital is also relatively very bullish on the stock, dishing out 0.68 percent of its 13F equity portfolio to HR.
Since Healthcare Realty Trust Inc (NYSE:HR) has experienced declining sentiment from the smart money, it’s safe to say that there was a specific group of fund managers that slashed their positions entirely last quarter. It’s worth mentioning that Mika Toikka’s AlphaCrest Capital Management cut the largest stake of all the hedgies tracked by Insider Monkey, valued at close to $0.8 million in stock. Renee Yao’s fund, Neo Ivy Capital, also said goodbye to its stock, about $0.5 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 3 funds last quarter.
Let’s check out hedge fund activity in other stocks similar to Healthcare Realty Trust Inc (NYSE:HR). We will take a look at Olink Holding AB (publ) (NASDAQ:OLK), Seaboard Corporation (NYSE:SEB), Alarm.com Holdings Inc (NASDAQ:ALRM), Agree Realty Corporation (NYSE:ADC), KB Home (NYSE:KBH), Ryman Hospitality Properties, Inc. (NYSE:RHP), and Driven Brands Holdings Inc. (NASDAQ:DRVN). This group of stocks’ market values match HR’s market value.
|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 19.4 hedge funds with bullish positions and the average amount invested in these stocks was $238 million. That figure was $173 million in HR’s case. KB Home (NYSE:KBH) is the most popular stock in this table. On the other hand Seaboard Corporation (NYSE:SEB) is the least popular one with only 14 bullish hedge fund positions. Healthcare Realty Trust Inc (NYSE:HR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HR is 58.1. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately HR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HR were disappointed as the stock returned 3.9% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.