Third Avenue Management recently released its Q1 2020 Investor Letter, a copy of which you can download here. The Third Avenue Real Estate Value Fund posted a return of -28.83% for the quarter as compared to its benchmark, the FTSE EPRA NAREIT Developed Index which returned -28.34% (before fees) in the 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 Vaccine maker Moderna (MRNA) is on everyone’s radar, with shares rocketing from the $20 level in January to over $60 today. Moderna stock got another small boost yesterday after the inventor of a leading coronavirus vaccine proposal was reported to be nearing a deal to sell its vaccine to Israel. Citing The Bank of America monthly fund manager survey for June showed the biggest decline in cash balances since Aug. 2009, a drop to 4.7% from 5.7%. Chesapeake Energy Corporation (CHK) is down on reports that the firm plans on filing for bankruptcy as soon as this week TORONTO , June 16, 2020 /CNW/ – CI Investments Inc. (“CI”) today launched CI Global Longevity Economy Fund, the industry’s first strategy to focus on companies benefiting from changes in consumer behaviour, technology and health care resulting from the trend towards longer, healthier
Third Avenue Management recently released its Q1 2020 Investor Letter, a copy of which you can download here. The Third Avenue Real Estate Value Fund posted a return of -28.83% for the quarter as compared to its benchmark, the FTSE EPRA NAREIT Developed Index which returned -28.34% (before fees) in the same quarter. You should check out Third Avenue Management’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.
In the said letter, Third Avenue Management highlighted a few stocks and ProLogis Inc. (NYSE:PLD) is one of them. ProLogis is a real estate investment trust company. Year-to-date, ProLogis Inc. (NYSE:PLD) stock gained 9.2% and on June 15th it had a closing price of $94.39. Here is what Third Avenue Management said:
“ProLogis is a US-based Real Estate Investment Trust (“REIT”) that is the largest owner of modern logistic facilities with a platform of more than 800 million square feet globally. Previously held in the Fund, the company’s portfolio is more than 96.0% leased (on an average lease term in excess of 6.0 years) and primarily located in key urban markets and trade hubs in North America, Europe, and Asia–essentially acting as critical infrastructure for supply chains in developed markets. At the same time, the company is extremely wellcapitalized with a net debt to asset ratio below 25%, a fixedcharge coverage ratio in excess of nine times, and more than $5 billion of liquidity. Therefore, ProLogis seems well-suited to deal with a contraction in near-term activity but ideally placed to benefit from structurally higher levels of demand for strategic distribution facilities given a continued rise in e-commerce, modernizing supply chains, and the “on-shoring” of manufacturing over the long-term.”
Real Estate Investment Trust
In Q1 2020, the number of bullish hedge fund positions on ProLogis Inc. (NYSE:PLD) stock increased by about 14% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with ProLogis’s growth potential. Our calculations showed that ProLogis Inc. (NYSE:PLD) isn’t ranked among the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
Video: Top 5 Stocks Among Hedge Funds
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. You can subscribe to our free enewsletter below to receive our stories in your inbox:
Disclosure: None. This article is originally published at Insider Monkey.
Author: Alex Smith
Hedge Funds Didn’t Lose Confidence In New Residential Investment Corp (NRZ)
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 New Residential Investment Corp (NYSE:NRZ) based on that data.
New Residential Investment Corp (NYSE:NRZ) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 23 hedge funds’ portfolios at the end of March. 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 Vishay Intertechnology (NYSE:VSH), Simmons First National Corporation (NASDAQ:SFNC), and Diodes Incorporated (NASDAQ:DIOD) to gather more data points. Our calculations also showed that NRZ 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.
At the moment there are several indicators stock market investors put to use to evaluate their holdings. Two of the most under-the-radar indicators are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can trounce the broader indices by a healthy amount (see the details here).
Steven Cohen of Point72 Asset Management
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 trades like this one. 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. Keeping this in mind we’re going to take a look at the fresh hedge fund action surrounding New Residential Investment Corp (NYSE:NRZ).
Heading into the second quarter of 2020, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. By comparison, 18 hedge funds held shares or bullish call options in NRZ a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Is NRZ A Good Stock To Buy?
Of the funds tracked by Insider Monkey, Steve Cohen’s Point72 Asset Management has the number one position in New Residential Investment Corp (NYSE:NRZ), worth close to $4.8 million, amounting to less than 0.1%% of its total 13F portfolio. On Point72 Asset Management’s heels is Millennium Management, led by Israel Englander, holding a $4.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions encompass Josh Donfeld and David Rogers’s Castle Hook Partners, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and David Harding’s Winton Capital Management. In terms of the portfolio weights assigned to each position Swift Run Capital Management allocated the biggest weight to New Residential Investment Corp (NYSE:NRZ), around 0.58% of its 13F portfolio. Castle Hook Partners is also relatively very bullish on the stock, earmarking 0.36 percent of its 13F equity portfolio to NRZ.
Judging by the fact that New Residential Investment Corp (NYSE:NRZ) has faced a decline in interest from the entirety of the hedge funds we track, we can see that there is a sect of money managers that slashed their entire stakes by the end of the first quarter. Interestingly, Renaissance Technologies said goodbye to the biggest position of all the hedgies tracked by Insider Monkey, totaling an estimated $33.2 million in stock, and Ken Heebner’s Capital Growth Management was right behind this move, as the fund said goodbye to about $29.8 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as New Residential Investment Corp (NYSE:NRZ) but similarly valued. These stocks are Vishay Intertechnology (NYSE:VSH), Simmons First National Corporation (NASDAQ:SFNC), Diodes Incorporated (NASDAQ:DIOD), and DouYu International Holdings Limited (NASDAQ:DOYU). All of these stocks’ market caps resemble NRZ’s market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VSH,23,266555,3 SFNC,4,2712,-2 DIOD,13,49641,-5 DOYU,15,30200,9 Average,13.75,87277,1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $87 million. That figure was $28 million in NRZ’s case. Vishay Intertechnology (NYSE:VSH) is the most popular stock in this table. On the other hand Simmons First National Corporation (NASDAQ:SFNC) is the least popular one with only 4 bullish hedge fund positions. New Residential Investment Corp (NYSE:NRZ) is not the most popular stock in this group but hedge fund interest is still above average. 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 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on NRZ as the stock returned 59.8% in Q2 (through June 10th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
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Moderna (MRNA) Stock Is a Winner, But How Much Higher Can It Go?
Vaccine maker Moderna (MRNA) is on everyone’s radar, with shares rocketing from the $20 level in January to over $60 today.
Moderna stock got another small boost yesterday after the inventor of a leading coronavirus vaccine proposal was reported to be nearing a deal to sell its vaccine to Israel. Citing unnamed sources within the Israeli Health Ministry, news site Ynet.com noted that with Phase 2 clinical trials of the vaccine — mRNA-1273 — nearly complete, Israel is already “in final negotiations” to buy supplies of the vaccine for distribution to its populace.
Which is great news, but here’s the thing: Moderna stock was in fact already primed to go higher even before the Israeli news was announced.
Over the weekend, you see, investment bank J.P. Morgan released an update on a recent discussion it had with Moderna CEO Stephane Bancel and CFO David Meline. In that note, J.P. Morgan analyst Cory Kasimov admitted that he struggles “to appropriately capture COVID-19 in MRNA’s valuation given all the unknowns around COVID-19 and the ultimate opportunity.” Regardless, Kasimov believes that as progress is made on the mRNA-1273 vaccine, and as the company issues updates on this progress, positive news flow is likely to keep Moderna stock rising at least in the “near term.”
So what should investors be looking for from Moderna in the weeks and months ahead?
First and foremost, Kasimov notes that initial data on the Phase 1 study of mRNA-1273 should be just “weeks” away. With Phase 1 complete, of course, Moderna itself already has all the data available “in house” and should be able to write it up in prose form in a matter of days. The trick is that the National Institute of Allergy and Infectious Diseases (NIAID) has control over the precise date for releasing this information. Dr. Anthony Fauci, however, who heads NIAID, has indicated that a release of the data is imminent.
Incidentally, it’s unlikely NIAID could sit long on this information even if it wanted to. Providing color to the procedure for issuing its updates, Moderna’s management confided that one reason it released initial Phase 1 data in mid-May, rather than waiting for the complete data to be assembled, was out of a desire to adhere to SEC regulation FD, and “out of caution so that the data would not be leaked.”
Simply put, with 14 billion ears around the globe straining for any news of a coronavirus vaccine, leaks are going to happen. To get ahead of such leaks, therefore, both Moderna and NIAID have an interest in releasing new data almost as soon as it is produced. On the one hand, this should minimize inside trading on such news. On the other hand, it practically ensures that there will be a steady flow of new updates on mRNA-1273’s (and other vaccine candidates’) progress, which should help keep the stock prices of vaccine makers rising.
In Moderna’s case, this news flow should continue throughout 2020, including a likely “end of September” date for injecting mRNA-1273 into all patients participating in a Phase 3 clinical trial of the vaccine, and culminating in the filing of a Biologics License Application, or BLA, permitting Moderna to produce the vaccine for use in interstate commerce, “by the end of the year.”
It remains to be seen, however, precisely how much higher such news can drive Moderna’s stock price. Although Kasimov has an “overweight” rating on the stock, he values the stock only at $62 a share. Compare that to Modern’s stock price at close of trading Monday — $66.57 — and you’ll see why this analyst struggles “to appropriately capture COVID-19 in MRNA’s valuation.” (To watch Kasimov’s track record, click here)
Kasimov is somewhat conservative compared to the general Wall Street view here. Moderna has a Strong Buy analyst consensus rating, based on 11 Buy ratings and 2 Holds set in recent weeks. The average price target is significantly higher than Kasimov, at $90.40, and implies an upside potential of 40.5% from the $64.34 share price. (See MRNA’s stock-price forecast on TipRanks)
To find good ideas for biotech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Here come the pros, chasing the retail crowd — fund manager survey shows biggest exit from cash into stocks in more than a decade
A survey of global fund managers shows the institutional crowd doing what retail investors have been doing for months — buying up stocks leveraged to an economic recovery, even though they are not quite sure it is coming.
The Bank of America monthly fund manager survey for June showed the biggest decline in cash balances since Aug. 2009, a drop to 4.7% from 5.7%.
Hedge fund net equity exposure soared to 52% from 34%, the highest level since Sept. 2018.
Investors overall were overweight stocks for the first time since February. They aggressively covered short positions in small-cap, value, European, emerging markets, banks and industrials, according to the Bank of America survey.
A net 78% say the stock market is “overvalued,” the most since 1998.
Bank of America headlined the report the “moody bulls.”
Wall Street is past “peak pessimism” but June optimism was “fragile, neurotic, nowhere near dangerously bullish,” according to strategists Michael Hartnett and Shirley Wu.
Conducted from June 5 to 11, 212 panelists with $598 billion in assets under management participated in the survey, Bank of America said.
Author: Steve Goldstein
CHK Bankruptcy Reports Send Stock Sliding – Schaeffer’s Investment Research
Chesapeake Energy Corporation (NYSE:CHK) is on Wall Street’s radar this morning amid reports that the firm plans on filing for bankruptcy as soon as this week. Chesapeake Energy is now the largest oil and gas producer to crumble from the weight of the energy sectors massive coronavirus-related plummet suffered during the past few months. In response, the stock is down 17.2% to trade at $15.51.
Save for a brief spike in early June, CHK has been at the mercy of its descending 60-day average since late-October, losing over 95% in the last nine months. The security has managed a one-month climb of 74.9%, though today’s drop puts it back below recent support at its 20-day moving average.
Sentiment surrounding CHK is lukewarm at best. Three call the equity a “hold,” while 10 say “sell.” Meanwhile, the consensus 12-month price target of $4.94 is an eyebrow-raising 72.7% discount to current levels.
Surprisingly, calls are being favored in the options pits. In the last 10 days, 125,000 calls crossed the tape, compared to 74,000 puts. Short interest has also seen a major decline since its late-February multi-year highs, off over 100% since this peak. Short sellers are still firmly in control, however. The 3,634,641 shares sold short represent 37.2% of CHK’s available float, or 1.3 days of trading at its average pace.
Author: by Lillian Currens
CI Investments launches investment strategy focused on the Longevity Economy
TORONTO , June 16, 2020 /CNW/ – CI Investments Inc. (“CI”) today launched CI Global Longevity Economy Fund, the industry’s first strategy to focus on companies benefiting from changes in consumer behaviour, technology and health care resulting from the trend towards longer, healthier lifespans. This mandate offers both mutual fund series and an exchange-traded fund (“ETF”) series. The ETF series has closed its initial offering and commenced trading today on the Toronto Stock Exchange under the symbol LONG.
CI actively manages the fund using insights and research from Dr. Joseph Coughlin , a global expert on demographic change, Founder and Director of the Massachusetts Institute of Technology AgeLab, and author of The Longevity Economy: Unlocking the World’s Fastest-Growing, Most Misunderstood Market.
“Given the broader trends and demographic shifts occurring around the world, we are providing investors with the opportunity to invest directly in companies that are poised to thrive in the longevity economy,” said Kurt MacAlpine , Chief Executive Officer of CI Financial Corp., parent company of CI.
“Those over 50 not only account for a growing share of the population, but they have better health, more active lifestyles, greater wealth, and diverse demands. The CI Global Longevity Economy strategy exploits the trends and changes driven by this historically unique cohort of consumers.”
Potential investment themes include: medical innovations; technologies that allow for aging in place; and the “silver lifestyle” – products and services that accommodate a more active retirement. Holdings will be selected based on their positive exposure to the longevity economy theme in combination with in-depth fundamental analysis.
“The advantages of an active approach include the ability to focus on the highest-quality companies within the longevity theme, along with the flexibility to quickly respond to unexpected events, such as the COVID-19 pandemic,” Mr. MacAlpine said. “Additionally, CI has deep expertise in global health care and other sectors relevant to the longevity economy.”
Lead Portfolio Manager is Dr. Jeff Elliott , Vice-President, Portfolio Management with Signature Global Asset Management, a division of CI. Dr. Elliott, who brings 17 years of experience as a specialist in health care investing to the role, will be supported by Signature’s large team of equity sector specialists and global strategists. He holds a Bachelor of Science (Honours) degree in biochemistry, a PhD in molecular biology and biochemistry, an MBA and the CFA designation. His career includes seven years as a portfolio manager at Signature focused on the health care sector, three years at an asset manager specializing in health care, and seven years as a health care equity analyst for UBS Securities in New York and Toronto .
The fund’s investment approach includes insights from Dr. Coughlin, who researches the impact of global demographic change and technology trends on consumer behaviour and business strategy, and is recognized as a leading global expert, advisor and speaker on this topic. CI Financial partnered with Dr. Coughlin in December 2019 to educate advisors and investors on retirement issues and to incorporate his expertise into longevity planning strategies and new investment solutions. CI Global Longevity Economy Fund is a result of this collaboration.
The Coughlin partnership and the new fund reflect CI Financial’s strategic priorities of modernizing its asset management business and expanding its wealth management platform.
CI Global Longevity Economy Fund is offered in mutual fund units in Series A, Series F, Series I and Series P, and in ETF C$ Series. Further information is available at ci.com.
Commissions, trailing commissions, management fees and expenses all may be associated with an investment in mutual funds and exchange traded funds (ETFs). Please read the prospectus before investing. Important information about mutual funds and ETFs is contained in its respective prospectus. Mutual funds and ETFs are not guaranteed; their values change frequently and past performance may not be repeated. You will usually pay brokerage fees to your dealer if you purchase or sell units of an ETF on recognized Canadian exchanges. If the units are purchased or sold on these Canadian exchanges, investors may pay more than the current net asset value when buying units of the ETF and may receive less than the current net asset value when selling them