The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Franklin Street Properties Corp. (NYSE:FSP).
Is Franklin Street Properties Corp. (NYSE:FSP) an attractive investment now? Prominent investors are turning less bullish. The number of long hedge fund positions went down by 2 recently. Our calculations also showed that FSP isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). FSP was in 5 hedge funds' portfolios at the end of the first quarter of 2020. There were 7 hedge funds in our database with FSP holdings at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are several signals market participants put to use to analyze publicly traded companies. Two of the less utilized signals are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the best fund managers can trounce their index-focused peers by a superb margin (see the details here).
[caption id="attachment_30621" align="aligncenter" width="399"]
Cliff Asness of AQR Capital Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let's take a gander at the new hedge fund action surrounding Franklin Street Properties Corp. (NYSE:FSP).
What does smart money think about Franklin Street Properties Corp. (NYSE:FSP)?
At the end of the first quarter, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -29% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in FSP over the last 18 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.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the biggest position in Franklin Street Properties Corp. (NYSE:FSP). Renaissance Technologies has a $21.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $6.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism consist of Cliff Asness's AQR Capital Management, John Overdeck and David Siegel's Two Sigma Advisors and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Franklin Street Properties Corp. (NYSE:FSP), around 0.02% of its 13F portfolio. Arrowstreet Capital is also relatively very bullish on the stock, dishing out 0.02 percent of its 13F equity portfolio to FSP.
Due to the fact that Franklin Street Properties Corp. (NYSE:FSP) has experienced bearish sentiment from the entirety of the hedge funds we track, we can see that there lies a certain "tier" of fund managers who sold off their entire stakes by the end of the first quarter. Interestingly, Michael Gelband's ExodusPoint Capital said goodbye to the largest position of the 750 funds followed by Insider Monkey, totaling close to $1.2 million in stock, and Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors was right behind this move, as the fund cut about $0.1 million worth. These transactions are important to note, as total hedge fund interest dropped by 2 funds by the end of the first quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Franklin Street Properties Corp. (NYSE:FSP) but similarly valued. These stocks are National Western Life Group, Inc. (NASDAQ:NWLI), MSG Networks Inc (NYSE:MSGN), FB Financial Corporation (NYSE:FBK), and The E.W. Scripps Company (NASDAQ:SSP). This group of stocks' market valuations resemble FSP's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NWLI,7,10224,1 MSGN,24,179071,-4 FBK,11,37526,6 SSP,12,74208,0 Average,13.5,75257,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $75 million. That figure was $31 million in FSP's case. MSG Networks Inc (NYSE:MSGN) is the most popular stock in this table. On the other hand National Western Life Group, Inc. (NASDAQ:NWLI) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Franklin Street Properties Corp. (NYSE:FSP) is even less popular than NWLI. Hedge funds dodged a bullet by taking a bearish stance towards FSP. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but managed to beat the market by 13.2 percentage points. Unfortunately FSP wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); FSP investors were disappointed as the stock returned -5.3% during the second quarter (through the end of May) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.