Is IRSA Propiedades Comerciales S.A. (IRCP) A Good Buy According To Hedge Funds?
Asma UL Husna
6 min read
We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP) based on that data.
Hedge fund interest in IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Allied Motion Technologies, Inc. (NASDAQ:AMOT), Legacy Housing Corporation (NASDAQ:LEGH), and China Distance Education Hldgs Ltd (NYSE:DL) to gather more data points. Our calculations also showed that IRCP 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).
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 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 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 leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let's analyze the key hedge fund action surrounding IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP).
How are hedge funds trading IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP)?
Heading into the second quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in IRCP 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.
Of the funds tracked by Insider Monkey, Richard Mashaal's Rima Senvest Management has the largest position in IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP), worth close to $4.1 million, comprising 0.5% of its total 13F portfolio. Sitting at the No. 2 spot is Robert Charles Gibbins of Autonomy Capital, with a $2 million position; 1.2% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism encompass Ari Zweiman's 683 Capital Partners, Don Morgan's Brigade Capital and . In terms of the portfolio weights assigned to each position Autonomy Capital allocated the biggest weight to IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP), around 1.19% of its 13F portfolio. Rima Senvest Management is also relatively very bullish on the stock, designating 0.48 percent of its 13F equity portfolio to IRCP.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the third quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP) but similarly valued. We will take a look at Allied Motion Technologies, Inc. (NASDAQ:AMOT), Legacy Housing Corporation (NASDAQ:LEGH), China Distance Education Hldgs Ltd (NYSE:DL), and Haverty Furniture Companies, Inc. (NYSE:HVT). This group of stocks' market caps match IRCP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMOT,13,36277,2 LEGH,4,5281,0 DL,2,3460,-1 HVT,10,33803,0 Average,7.25,19705,0.25 [/table]
As you can see these stocks had an average of 7.25 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $8 million in IRCP's case. Allied Motion Technologies, Inc. (NASDAQ:AMOT) is the most popular stock in this table. On the other hand China Distance Education Hldgs Ltd (NYSE:DL) is the least popular one with only 2 bullish hedge fund positions. IRSA Propiedades Comerciales S.A. (NASDAQ:IRCP) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds 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 and surpassed the market by 13.2 percentage points. Unfortunately IRCP wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); IRCP investors were disappointed as the stock returned -17.9% during the second quarter 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 in 2020.
