DCT Industrial Trust Inc. (NYSE:DCT) has seen an increase in activity from the world’s largest hedge funds recently.
According to most market participants, hedge funds are assumed to be unimportant, old investment vehicles of the past. While there are over 8000 funds with their doors open today, we look at the aristocrats of this group, about 450 funds. It is estimated that this group has its hands on the majority of the smart money’s total capital, and by keeping an eye on their best stock picks, we have brought to light a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as important, bullish insider trading sentiment is another way to parse down the world of equities. There are a variety of incentives for an insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Several empirical studies have demonstrated the useful potential of this method if shareholders understand what to do (learn more here).
Consequently, it’s important to take a glance at the latest action encompassing DCT Industrial Trust Inc. (NYSE:DCT).
How are hedge funds trading DCT Industrial Trust Inc. (NYSE:DCT)?
Heading into 2013, a total of 7 of the hedge funds we track were bullish in this stock, a change of 40% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in DCT Industrial Trust Inc. (NYSE:DCT). Royce & Associates has a $7.9 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Israel Englander of Millennium Management, with a $6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Jim Simons’s Renaissance Technologies, Anil Stevens and Glenn Shapiro’s Parameter Capital Management and Cliff Asness’s AQR Capital Management.
As aggregate interest increased, some big names were breaking ground themselves. Millennium Management, managed by Israel Englander, initiated the most outsized position in DCT Industrial Trust Inc. (NYSE:DCT). Millennium Management had 6 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $2.6 million investment in the stock during the quarter. The only other fund with a brand new DCT position is Ken Griffin’s Citadel Investment Group.
What do corporate executives and insiders think about DCT Industrial Trust Inc. (NYSE:DCT)?
Insider buying is particularly usable when the company in question has seen transactions within the past half-year. Over the last six-month time frame, DCT Industrial Trust Inc. (NYSE:DCT) has experienced zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to DCT Industrial Trust Inc. (NYSE:DCT). These stocks are Eastgroup Properties Inc (NYSE:EGP), First Industrial Realty Trust, Inc. (NYSE:FR), Potlatch Corporation (NASDAQ:PCH), Sovran Self Storage Inc (NYSE:SSS), and CubeSmart (NYSE:CUBE). All of these stocks are in the reit – industrial industry and their market caps are similar to DCT’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Eastgroup Properties Inc (NYSE:EGP) | 2 | 0 | 4 |
| First Industrial Realty Trust, Inc. (NYSE:FR) | 13 | 1 | 3 |
| Potlatch Corporation (NASDAQ:PCH) | 11 | 1 | 9 |
| Sovran Self Storage Inc (NYSE:SSS) | 10 | 0 | 4 |
| CubeSmart (NYSE:CUBE) | 4 | 0 | 1 |
With the results shown by our tactics, everyday investors should always keep an eye on hedge fund and insider trading activity, and DCT Industrial Trust Inc. (NYSE:DCT) is an important part of this process.
