Getty Realty Corp. (GTY): Hedge Funds and Insiders Are Bearish, What Should You Do?: Inland Real Estate Corporation (IRC), Saul Centers Inc (BFS)

Getty Realty Corp. (NYSE:GTY) was in 5 hedge funds’ portfolio at the end of the fourth quarter of 2012. GTY shareholders have witnessed a decrease in support from the world’s most elite money managers lately. There were 6 hedge funds in our database with GTY positions at the end of the previous quarter.

In the eyes of most investors, hedge funds are perceived as unimportant, outdated investment tools of yesteryear. While there are more than 8000 funds with their doors open at present, we choose to focus on the masters of this club, about 450 funds. It is widely believed that this group has its hands on most of all hedge funds’ total capital, and by tracking their best investments, we have deciphered a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).

Equally as important, optimistic insider trading activity is another way to parse down the investments you’re interested in. Obviously, there are many incentives for an upper level exec to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this tactic if “monkeys” know where to look (learn more here).

With these “truths” under our belt, it’s important to take a look at the recent action encompassing Getty Realty Corp. (NYSE:GTY).

How have hedgies been trading Getty Realty Corp. (NYSE:GTY)?

In preparation for this year, a total of 5 of the hedge funds we track were bullish in this stock, a change of -17% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes meaningfully.

Of the funds we track, Oaktree Capital Management, managed by Howard Marks, holds the most valuable position in Getty Realty Corp. (NYSE:GTY). Oaktree Capital Management has a $25.7 million position in the stock, comprising 0.5% of its 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which held a $1.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Ken Griffin’s Citadel Investment Group, Michael Price’s MFP Investors and Jim Simons’s Renaissance Technologies.

Due to the fact that Getty Realty Corp. (NYSE:GTY) has witnessed a declination in interest from hedge fund managers, logic holds that there was a specific group of money managers who sold off their entire stakes at the end of the year. It’s worth mentioning that David Costen Haley’s HBK Investments dumped the largest stake of the 450+ funds we monitor, totaling an estimated $2.5 million in stock.. D. E. Shaw’s fund, D E Shaw, also said goodbye to its stock, about $0.7 million worth. These moves are interesting, as total hedge fund interest fell by 1 funds at the end of the year.

Insider trading activity in Getty Realty Corp. (NYSE:GTY)

Bullish insider trading is particularly usable when the primary stock in question has seen transactions within the past six months. Over the last six-month time frame, Getty Realty Corp. (NYSE:GTY) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Getty Realty Corp. (NYSE:GTY). These stocks are Inland Real Estate Corporation (NYSE:IRC), Saul Centers Inc (NYSE:BFS), Kite Realty Group Trust (NYSE:KRG), Retail Opportunity Investments Corp (NASDAQ:ROIC), and Urstadt Biddle Properties Inc (NYSE:UBA). This group of stocks are in the reit – retail industry and their market caps are closest to GTY’s market cap.

With the returns exhibited by the aforementioned tactics, everyday investors should always monitor hedge fund and insider trading sentiment, and Getty Realty Corp. (NYSE:GTY) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds