Is RLJ Lodging Trust (NYSE:RLJ) a bargain? Prominent investors are taking an optimistic view. The number of bullish hedge fund bets increased by 9 lately.
At the moment, there are many methods investors can use to monitor their holdings. Two of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top hedge fund managers can outpace the S&P 500 by a very impressive margin (see just how much).
Equally as key, bullish insider trading sentiment is a second way to break down the world of equities. There are a number of incentives for a corporate insider to get rid of shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this method if piggybackers understand where to look (learn more here).
Now, let’s take a glance at the key action surrounding RLJ Lodging Trust (NYSE:RLJ).
What have hedge funds been doing with RLJ Lodging Trust (NYSE:RLJ)?
At Q1’s end, a total of 20 of the hedge funds we track were bullish in this stock, a change of 82% from the first quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings meaningfully.
According to our comprehensive database, Ken Heebner’s Capital Growth Management had the most valuable position in RLJ Lodging Trust (NYSE:RLJ), worth close to $86.8 million, accounting for 2.2% of its total 13F portfolio. Sitting at the No. 2 spot is AEW Capital Management, managed by Jeffrey Furber, which held a $41.5 million position; 1% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include D. E. Shaw’s D E Shaw, John Khoury’s Long Pond Capital and Cliff Asness’s AQR Capital Management.
Consequently, specific money managers have been driving this bullishness. Long Pond Capital, managed by John Khoury, assembled the biggest position in RLJ Lodging Trust (NYSE:RLJ). Long Pond Capital had 16.2 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $9.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Richard Driehaus’s Driehaus Capital, Anand Parekh’s Alyeska Investment Group, and Brian Taylor’s Pine River Capital Management.
What have insiders been doing with RLJ Lodging Trust (NYSE:RLJ)?
Bullish insider trading is most useful when the company in question has seen transactions within the past six months. Over the latest six-month time period, RLJ Lodging Trust (NYSE:RLJ) has experienced zero 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 RLJ Lodging Trust (NYSE:RLJ). These stocks are Pebblebrook Hotel Trust (NYSE:PEB), Strategic Hotels and Resorts Inc (NYSE:BEE), DiamondRock Hospitality Company (NYSE:DRH), Sunstone Hotel Investors Inc (NYSE:SHO), and LaSalle Hotel Properties (NYSE:LHO). This group of stocks are the members of the reit – hotel/motel industry and their market caps are closest to RLJ’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Pebblebrook Hotel Trust (NYSE:PEB) | 5 | 0 | 0 |
| Strategic Hotels and Resorts Inc (NYSE:BEE) | 20 | 0 | 0 |
| DiamondRock Hospitality Company (NYSE:DRH) | 15 | 0 | 0 |
| Sunstone Hotel Investors Inc (NYSE:SHO) | 13 | 1 | 1 |
| LaSalle Hotel Properties (NYSE:LHO) | 8 | 0 | 1 |
With the returns demonstrated by our studies, retail investors should always pay attention to hedge fund and insider trading activity, and RLJ Lodging Trust (NYSE:RLJ) shareholders fit into this picture quite nicely.
