Is Physicians Realty Trust (NYSE:DOC) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Physicians Realty Trust (NYSE:DOC) was in 14 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 23. DOC investors should pay attention to a decrease in activity from the world's largest hedge funds of late. There were 15 hedge funds in our database with DOC positions at the end of the second quarter. Our calculations also showed that DOC 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.
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Charles Clough of Clough Capital 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 take a gander at the recent hedge fund action surrounding Physicians Realty Trust (NYSE:DOC).
Do Hedge Funds Think DOC Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards DOC over the last 21 quarters. With hedgies' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
Among these funds, Citadel Investment Group held the most valuable stake in Physicians Realty Trust (NYSE:DOC), which was worth $47.4 million at the end of the third quarter. On the second spot was Cardinal Capital which amassed $28.9 million worth of shares. Clough Capital Partners, Millennium Management, and Winton Capital 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 Cardinal Capital allocated the biggest weight to Physicians Realty Trust (NYSE:DOC), around 1.21% of its 13F portfolio. Clough Capital Partners is also relatively very bullish on the stock, dishing out 0.95 percent of its 13F equity portfolio to DOC.
Judging by the fact that Physicians Realty Trust (NYSE:DOC) has faced falling interest from the aggregate hedge fund industry, it's easy to see that there was a specific group of funds that slashed their entire stakes last quarter. Intriguingly, Steve Cohen's Point72 Asset Management dropped the biggest position of the 750 funds followed by Insider Monkey, totaling close to $0.9 million in stock, and John Overdeck and David Siegel's Two Sigma Advisors was right behind this move, as the fund dumped about $0.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 1 funds last quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Physicians Realty Trust (NYSE:DOC) but similarly valued. We will take a look at Ultrapar Participacoes SA (NYSE:UGP), Shell Midstream Partners LP (NYSE:SHLX), Exponent, Inc. (NASDAQ:EXPO), Emcor Group Inc (NYSE:EME), FibroGen Inc (NASDAQ:FGEN), Axis Capital Holdings Limited (NYSE:AXS), and Colfax Corporation (NYSE:CFX). This group of stocks' market values match DOC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UGP,8,32826,1 SHLX,6,22934,0 EXPO,25,80076,6 EME,29,177709,0 FGEN,24,301647,-1 AXS,23,585135,-12 CFX,45,756903,6 Average,22.9,279604,0 [/table]
As you can see these stocks had an average of 22.9 hedge funds with bullish positions and the average amount invested in these stocks was $280 million. That figure was $99 million in DOC's case. Colfax Corporation (NYSE:CFX) is the most popular stock in this table. On the other hand Shell Midstream Partners LP (NYSE:SHLX) is the least popular one with only 6 bullish hedge fund positions. Physicians Realty Trust (NYSE:DOC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for DOC is 32.5. 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 negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 surpassed the market again by 16.2 percentage points. Unfortunately DOC wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); DOC investors were disappointed as the stock returned 0.8% since the end of September (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.
