Hedge Funds Are Betting On Public Storage (NYSE:PSA)

Public Storage (NYSE:PSA) investors should be aware of an increase in hedge fund interest recently.

According to most shareholders, hedge funds are perceived as worthless, outdated financial tools of years past. While there are greater than 8000 funds in operation at present, we at Insider Monkey choose to focus on the aristocrats of this group, about 450 funds. Most estimates calculate that this group oversees most of the hedge fund industry’s total capital, and by monitoring their best investments, we have come up with a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Equally as important, bullish insider trading activity is a second way to parse down the stock market universe. Just as you’d expect, there are lots of reasons for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this strategy if piggybackers understand where to look (learn more here).

Now, let’s take a gander at the latest action regarding Public Storage (NYSE:PSA).

What have hedge funds been doing with Public Storage (NYSE:PSA)?

In preparation for this year, a total of 21 of the hedge funds we track were long in this stock, a change of 5% from the third quarter. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings significantly.

According to our comprehensive database, AEW Capital Management, managed by Jeffrey Furber, holds the biggest position in Public Storage (NYSE:PSA). AEW Capital Management has a $223 million position in the stock, comprising 5.9% of its 13F portfolio. Coming in second is Ken Heebner of Capital Growth Management, with a $68 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include D. E. Shaw’s D E Shaw, Jim Simons’s Renaissance Technologies and Phill Gross and Robert Atchinson’s Adage Capital Management.

Now, specific money managers were leading the bulls’ herd. Capital Growth Management, managed by Ken Heebner, initiated the most outsized position in Public Storage (NYSE:PSA). Capital Growth Management had 68 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also initiated a $9 million position during the quarter. The other funds with brand new PSA positions are Richard Driehaus’s Driehaus Capital and David Costen Haley’s HBK Investments.

What do corporate executives and insiders think about Public Storage (NYSE:PSA)?

Bullish insider trading is at its handiest when the company in focus has experienced transactions within the past six months. Over the latest 180-day time frame, Public Storage (NYSE:PSA) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

With the returns demonstrated by Insider Monkey’s studies, retail investors should always pay attention to hedge fund and insider trading activity, and Public Storage (NYSE:PSA) is no exception.

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