Do Hedge Funds Love Kimco Realty Corp (KIM)?

·5 min read

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Kimco Realty Corp (NYSE:KIM).

Kimco Realty Corp (NYSE:KIM) has seen an increase in activity from the world's largest hedge funds recently. Kimco Realty Corp (NYSE:KIM) was in 20 hedge funds' portfolios at the end of June. The all time high for this statistic is 28. There were 17 hedge funds in our database with KIM holdings at the end of March. Our calculations also showed that KIM isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Chuck Royce
Chuck Royce

Chuck Royce of Royce & Associates

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind let's take a gander at the recent hedge fund action encompassing Kimco Realty Corp (NYSE:KIM).

Do Hedge Funds Think KIM Is A Good Stock To Buy Now?

At the end of the second quarter, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from the first quarter of 2020. By comparison, 28 hedge funds held shares or bullish call options in KIM a year ago. With hedge funds' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

Among these funds, Arrowstreet Capital held the most valuable stake in Kimco Realty Corp (NYSE:KIM), which was worth $54.6 million at the end of the second quarter. On the second spot was D E Shaw which amassed $48.2 million worth of shares. Millennium Management, Royce & Associates, and Kettle Hill 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 Kettle Hill Capital Management allocated the biggest weight to Kimco Realty Corp (NYSE:KIM), around 2.75% of its 13F portfolio. Weld Capital Management is also relatively very bullish on the stock, setting aside 0.63 percent of its 13F equity portfolio to KIM.

As one would reasonably expect, some big names have jumped into Kimco Realty Corp (NYSE:KIM) headfirst. Tudor Investment Corp, managed by Paul Tudor Jones, created the most valuable position in Kimco Realty Corp (NYSE:KIM). Tudor Investment Corp had $15.2 million invested in the company at the end of the quarter. Clint Carlson's Carlson Capital also made a $7.3 million investment in the stock during the quarter. The following funds were also among the new KIM investors: Dmitry Balyasny's Balyasny Asset Management, Richard SchimeláandáLawrence Sapanski's Cinctive Capital Management, and Paul Marshall and Ian Wace's Marshall Wace LLP.

Let's now review hedge fund activity in other stocks similar to Kimco Realty Corp (NYSE:KIM). We will take a look at Globant SA (NYSE:GLOB), Service Corporation International (NYSE:SCI), Phillips 66 Partners LP (NYSE:PSXP), Sealed Air Corporation (NYSE:SEE), Bright Horizons Family Solutions Inc (NYSE:BFAM), Juniper Networks, Inc. (NYSE:JNPR), and ADT Inc. (NYSE:ADT). This group of stocks' market caps are similar to KIM's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GLOB,23,447290,6 SCI,24,527197,1 PSXP,5,36056,0 SEE,28,705369,1 BFAM,17,107496,-1 JNPR,27,355046,-2 ADT,21,417800,5 Average,20.7,370893,1.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.7 hedge funds with bullish positions and the average amount invested in these stocks was $371 million. That figure was $219 million in KIM's case. Sealed Air Corporation (NYSE:SEE) is the most popular stock in this table. On the other hand Phillips 66 Partners LP (NYSE:PSXP) is the least popular one with only 5 bullish hedge fund positions. Kimco Realty Corp (NYSE:KIM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KIM is 62. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on KIM as the stock returned 11% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.

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