In this article we are going to use hedge fund sentiment as a tool and determine whether Plymouth Industrial REIT, Inc. (NYSE:PLYM) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds' picks don't beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Is PLYM a good stock to buy now? Plymouth Industrial REIT, Inc. (NYSE:PLYM) has seen an increase in activity from the world's largest hedge funds recently. Plymouth Industrial REIT, Inc. (NYSE:PLYM) was in 14 hedge funds' portfolios at the end of September. The all time high for this statistic is 9. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 7 hedge funds in our database with PLYM holdings at the end of June. Our calculations also showed that PLYM 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In the eyes of most shareholders, hedge funds are perceived as worthless, outdated financial tools of yesteryear. While there are over 8000 funds trading at the moment, Our researchers choose to focus on the moguls of this group, around 850 funds. These money managers manage the lion's share of all hedge funds' total capital, and by monitoring their best picks, Insider Monkey has unearthed several investment strategies that have historically beaten Mr. Market. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Stuart Zimmer Zimmer Partners
Stuart Zimmer of Zimmer Partners
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. With all of this in mind let's view the recent hedge fund action surrounding Plymouth Industrial REIT, Inc. (NYSE:PLYM).
Do Hedge Funds Think PLYM Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in PLYM over the last 21 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Is PLYM A Good Stock To Buy?
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the largest position in Plymouth Industrial REIT, Inc. (NYSE:PLYM). Renaissance Technologies has a $6.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Millennium Management, led by Israel Englander, holding a $6.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism consist of Dmitry Balyasny's Balyasny Asset Management, Lawrence Raiman's LDR Capital and Daniel Johnson's Gillson Capital. In terms of the portfolio weights assigned to each position LDR Capital allocated the biggest weight to Plymouth Industrial REIT, Inc. (NYSE:PLYM), around 4.82% of its 13F portfolio. Hill Winds Capital is also relatively very bullish on the stock, setting aside 2.01 percent of its 13F equity portfolio to PLYM.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls' herd. Gillson Capital, managed by Daniel Johnson, initiated the biggest position in Plymouth Industrial REIT, Inc. (NYSE:PLYM). Gillson Capital had $3.7 million invested in the company at the end of the quarter. Matthew Crandall Gilman's Hill Winds Capital also initiated a $2.5 million position during the quarter. The other funds with new positions in the stock are Stuart J. Zimmer's Zimmer Partners, Paul Tudor Jones's Tudor Investment Corp, and Ken Griffin's Citadel Investment Group.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Plymouth Industrial REIT, Inc. (NYSE:PLYM) but similarly valued. We will take a look at Baytex Energy Corp (NYSE:BTE), Tortoise Energy Infrastructure Corporation (NYSE:TYG), Farmland Partners Inc (NYSE:FPI), Vista Oil & Gas, S.A.B. de C.V. (NYSE:VIST), Aduro BioTech Inc (NASDAQ:ADRO), Uranium Energy Corp. (NYSE:UEC), and MiX Telematics Limited (NYSE:MIXT). All of these stocks' market caps are closest to PLYM's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BTE,9,7132,3 TYG,2,1839,1 FPI,8,5154,0 VIST,9,31931,4 ADRO,9,36124,-2 UEC,3,3598,-1 MIXT,7,15563,-1 Average,6.7,14477,0.6 [/table]
As you can see these stocks had an average of 6.7 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $36 million in PLYM's case. Baytex Energy Corp (NYSE:BTE) is the most popular stock in this table. On the other hand Tortoise Energy Infrastructure Corporation (NYSE:TYG) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Plymouth Industrial REIT, Inc. (NYSE:PLYM) is more popular among hedge funds. Our overall hedge fund sentiment score for PLYM is 90. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Unfortunately PLYM wasn't nearly as popular as these 20 stocks and hedge funds that were betting on PLYM were disappointed as the stock returned 8.7% since the end of the third quarter (through 12/8) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
