First Potomac Realty Trust (FPO): Are Hedge Funds Right About This Stock?

First Potomac Realty Trust (NYSE:FPO) was in 5 hedge funds’ portfolio at the end of the first quarter of 2013. FPO shareholders have witnessed a decrease in support from the world’s most elite money managers lately. There were 7 hedge funds in our database with FPO holdings at the end of the previous quarter.

In today’s marketplace, there are plenty of metrics investors can use to track Mr. Market. A duo of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite money managers can outclass the S&P 500 by a superb margin (see just how much).

Just as beneficial, optimistic insider trading sentiment is another way to break down the marketplace. As the old adage goes: there are a number of stimuli for a corporate insider to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the valuable potential of this strategy if shareholders understand what to do (learn more here).

Consequently, let’s take a gander at the latest action regarding First Potomac Realty Trust (NYSE:FPO).

What does the smart money think about First Potomac Realty Trust (NYSE:FPO)?

At the end of the first quarter, a total of 5 of the hedge funds we track held long positions in this stock, a change of -29% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes meaningfully.

Of the funds we track, AEW Capital Management, managed by Jeffrey Furber, holds the biggest position in First Potomac Realty Trust (NYSE:FPO). AEW Capital Management has a $28.1 million position in the stock, comprising 0.7% of its 13F portfolio. Sitting at the No. 2 spot is Third Avenue Management, managed by Martin Whitman, which held a $5.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and J. Alan Reid, Jr.’s Forward Management.

Seeing as First Potomac Realty Trust (NYSE:FPO) has witnessed falling interest from the entirety of the hedge funds we track, logic holds that there was a specific group of fund managers who sold off their entire stakes heading into Q2. At the top of the heap, Eric D. Hovde’s Hovde Capital sold off the largest stake of the 450+ funds we key on, comprising about $3.3 million in stock.. Ken Griffin’s fund, Citadel Investment Group, also said goodbye to its stock, about $0.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds heading into Q2.

Insider trading activity in First Potomac Realty Trust (NYSE:FPO)

Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has experienced transactions within the past 180 days. Over the latest half-year time period, First Potomac Realty Trust (NYSE:FPO) has seen 1 unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to First Potomac Realty Trust (NYSE:FPO). These stocks are Hudson Pacific Properties Inc (NYSE:HPP), Franklin Street Properties Corp. (NYSEAMEX:FSP), CapLease, Inc. (NYSE:LSE), Select Income REIT (NYSE:SIR), and CoreSite Realty Corp (NYSE:COR). All of these stocks are in the reit – office industry and their market caps resemble FPO’s market cap.

With the results demonstrated by the aforementioned studies, everyday investors must always watch hedge fund and insider trading activity, and First Potomac Realty Trust (NYSE:FPO) applies perfectly to this mantra.

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