Associated Estates Realty Corporation (NYSE:AEC) has seen an increase in hedge fund sentiment recently.
To the average investor, there are many metrics investors can use to watch their holdings. Two of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite money managers can outperform the S&P 500 by a significant margin (see just how much).
Equally as integral, positive insider trading sentiment is another way to parse down the stock market universe. Obviously, there are many incentives for a bullish insider to cut shares of his or her company, but just one, very clear reason why they would buy. Several academic studies have demonstrated the impressive potential of this method if investors understand what to do (learn more here).
Consequently, it’s important to take a gander at the recent action surrounding Associated Estates Realty Corporation (NYSE:AEC).
What have hedge funds been doing with Associated Estates Realty Corporation (NYSE:AEC)?
In preparation for this quarter, a total of 9 of the hedge funds we track were bullish in this stock, a change of 13% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings meaningfully.
According to our comprehensive database, J. Alan Reid, Jr.’s Forward Management had the biggest position in Associated Estates Realty Corporation (NYSE:AEC), worth close to $15.1 million, comprising 0.9% of its total 13F portfolio. On Forward Management’s heels is AQR Capital Management, managed by Cliff Asness, which held a $11 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other peers that are bullish include David Dreman’s Dreman Value Management, Ken Griffin’s Citadel Investment Group and Richard Driehaus’s Driehaus Capital.
As one would reasonably expect, specific money managers were breaking ground themselves. Dreman Value Management, managed by David Dreman, created the most valuable position in Associated Estates Realty Corporation (NYSE:AEC). Dreman Value Management had 6.4 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.4 million position during the quarter. The only other fund with a brand new AEC position is Matthew Hulsizer’s PEAK6 Capital Management.
What have insiders been doing with Associated Estates Realty Corporation (NYSE:AEC)?
Insider buying is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the last 180-day time period, Associated Estates Realty Corporation (NYSE:AEC) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Associated Estates Realty Corporation (NYSE:AEC). These stocks are Dynex Capital Inc (NYSE:DX), Apollo Residential Mortgage Inc (NYSE:AMTG), Resource Capital Corp. (NYSE:RSO), Education Realty Trust, Inc. (NYSE:EDR), and Silver Bay Realty Trust Corp (NYSE:SBY). This group of stocks are in the reit – residential industry and their market caps resemble AEC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Dynex Capital Inc (NYSE:DX) | 4 | 0 | 1 |
| Apollo Residential Mortgage Inc (NYSE:AMTG) | 15 | 1 | 0 |
| Resource Capital Corp. (NYSE:RSO) | 12 | 0 | 0 |
| Education Realty Trust, Inc. (NYSE:EDR) | 9 | 1 | 3 |
| Silver Bay Realty Trust Corp (NYSE:SBY) | 17 | 8 | 3 |
With the returns exhibited by the aforementioned studies, retail investors should always monitor hedge fund and insider trading activity, and Associated Estates Realty Corporation (NYSE:AEC) is an important part of this process.
