Most investors tend to think that hedge funds and other asset managers are worthless because they can’t even beat simple index fund portfolios. In fact, most people expect hedge funds to compete and outperform the bull market we have witnessed in recent years. However, hedge funds are usually partially hedged and aim to generate attractive risk-adjusted returns rather than following the ups and downs of the stock markets with the expectation that they will outperform the broader market. Our research shows that some hedge funds have excellent stock selection skills (and we can identify these hedge funds in advance quite precisely), so let’s take a look at the sentiment of smart money towards American. Assets Trust, Inc (NYSE:AAT).
East American Assets Trust, Inc (NYSE:AAT) healthy stock for your wallet? The best stock pickers reduced their bets on the stock. The number of bull hedge fund positions has fallen by 2 recently. American Assets Trust, Inc (NYSE:AAT) was in 10 hedge fund portfolios at the end of the second quarter of 2021. The all-time high for this statistic is 20. Our calculations have also shown that AAT is not among the 30 most popular stocks among hedge funds (click for Q2 ranking).
For the average investor, there are many formulas that stock market investors use to value publicly traded companies. A duo of the best formulas are hedge funds and insider trading sentiment. Our researchers have shown that historically those who follow the best choices of the best investment managers can far exceed the S&P 500 (see details here). Additionally, our monthly newsletter’s long stock picks portfolio has returned 185.4% since March 2017 (through August 2021) and has beaten the S&P 500 Index by over 79 percentage points. You can download a sample issue of this newsletter on our website .
Donald Sussman of Paloma Partners
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Do hedge funds think AAT is a good stock to buy now?
At the end of June, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this security, a variation of -17% compared to the first quarter of 2020. The graph below shows the number of hedge funds with a position bullish. in AAT during the last 24 quarters. With the capital of hedge funds changing hands, there is a select group of key hedge fund managers who were significantly increasing their stakes (or already accumulating large positions).
Among these funds, Arrowstreet Capital held the most valuable stake in American Assets Trust, Inc (NYSE: AAT), which was worth $ 7.7 million at the end of the second quarter. In second place was Steel Canyon Capital which raised $ 5.8 million in shares. Millennium Management, Renaissance Technologies and AQR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders in the company. In terms of portfolio weights assigned to each position Steel Canyon Capital assigned the greatest weight to American Assets Trust, Inc (NYSE: AAT), approximately 4% of its 13F portfolio. Forward Management is also relatively very bullish on the stock, setting aside 0.08% of its 13F equity portfolio at AAT.
Given that American Assets Trust, Inc (NYSE: AAT) has seen a drop in sentiment in the overall hedge fund industry, we can see that there is a fund cult that has decided to sell all of their funds. participations by the end of the second quarter. Interestingly, Donald Sussman Paloma Partners said goodbye to the largest position in the “top crust” of funds monitored by Insider Monkey, valued at around $ 0.8 million in stocks. DE Shaw’s fund, DE Shaw, also cut its shares, worth about $ 0.6 million. These moves are important to note, as total hedge fund interest fell by 2 funds at the end of the second quarter.
Now let’s take a look at the hedge fund activity in other stocks – not necessarily in the same industry as American Assets Trust, Inc (NYSE: AAT) but of similar value. These stocks are Renasant Corporation (NASDAQ:RNST), CareTrust REIT Inc (NASDAQ:CTRE), InterDigital, Inc. (NASDAQ:IDCC), Century Communities, Inc (NYSE:CCS), Gray Television, Inc. (NYSE:GTN), Silicon Motion Technology Corp. (NASDAQ:SIMO) and Urban Edge Properties (NYSE:EU). The market values ââof this group of shares correspond to the market value of AAT.
[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of HF position RNST, 9.7016.2 CTRE, 13.43106, -2 IDCC, 19.195338.4 CCS, 25.112440.1 GTN, 20,101699, -5 SIMO, 20,492206, -4 EU, 16,110060,4 Medium, 17,4,151695,0 [/table]
See the table here if you have formatting problems.
As you can see, these stocks had an average of 17.4 hedge funds with bullish positions and the average amount invested in these stocks was $ 152 million. That figure was $ 20 million in the case of AAT. Century Communities, Inc (NYSE:CCS) is the most popular action in this table. On the other hand, Renasant Corporation (NASDAQ:RNST) is the least popular with only 9 bullish hedge fund positions. American Assets Trust, Inc (NYSE: AAT) isn’t the least popular stock in this group, but hedge fund interest is still below average. Our overall hedge fund sentiment score for AAT is 21.1. Stocks with a 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 have shown 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 25.7% in 2021 through September 27 and beat the market by 6.2 percentage points. A small number of hedge funds were also right to bet on AAT, but not to the same extent, as the stock has returned 4.4% since the end of the second quarter (through September 27) and outperformed the Marlet.
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Disclosure: none. This article originally appeared on Monkey initiate.