Is Federal Realty Investment Trust (NYSE:FRT) going to take off soon? Hedge funds are becoming more confident. The number of long hedge fund bets moved up by 1 recently.
In the eyes of most investors, hedge funds are viewed as worthless, outdated financial tools of years past. While there are more than 8000 funds with their doors open at present, we choose to focus on the top tier of this group, around 450 funds. It is estimated that this group controls the lion’s share of all hedge funds’ total capital, and by watching their best equity investments, we have spotted a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 topped the S&P 500 index by 24 percentage points in 7 months (see the details here).
Equally as key, optimistic insider trading sentiment is a second way to break down the marketplace. Just as you’d expect, there are lots of incentives for an insider to drop shares of his or her company, but only one, very simple reason why they would buy. Various academic studies have demonstrated the useful potential of this strategy if you know where to look (learn more here).
Now, let’s take a look at the latest action encompassing Federal Realty Investment Trust (NYSE:FRT).
How have hedgies been trading Federal Realty Investment Trust (NYSE:FRT)?
At the end of the fourth quarter, a total of 12 of the hedge funds we track were long in this stock, a change of 9% from the third quarter. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully.
When looking at the hedgies we track, Jeffrey Furber’s AEW Capital Management had the largest position in Federal Realty Investment Trust (NYSE:FRT), worth close to $137 million, comprising 3.6% of its total 13F portfolio. The second largest stake is held by D. E. Shaw of D E Shaw, with a $78.2 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Ken Heebner’s Capital Growth Management, Jim Simons’s Renaissance Technologies and Ken Griffin’s Citadel Investment Group.
As aggregate interest increased, key money managers were leading the bulls’ herd. Capital Growth Management, managed by Ken Heebner, initiated the biggest position in Federal Realty Investment Trust (NYSE:FRT). Capital Growth Management had 44.2 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $2.7 million investment in the stock during the quarter.
What have insiders been doing with Federal Realty Investment Trust (NYSE:FRT)?
Insider purchases made by high-level executives is best served when the company in focus has seen transactions within the past half-year. Over the last 180-day time frame, Federal Realty Investment Trust (NYSE:FRT) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Federal Realty Investment Trust (NYSE:FRT). These stocks are Kimco Realty Corp (NYSE:KIM), DDR Corp (NYSE:DDR), Macerich Co (NYSE:MAC), Realty Income Corp (NYSE:O), and SL Green Realty Corp (NYSE:SLG). This group of stocks are in the reit – retail industry and their market caps resemble FRT’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Kimco Realty Corp (NYSE:KIM) | 11 | 0 | 4 |
| DDR Corp (NYSE:DDR) | 9 | 0 | 7 |
| Macerich Co (NYSE:MAC) | 9 | 2 | 4 |
| Realty Income Corp (NYSE:O) | 6 | 0 | 6 |
| SL Green Realty Corp (NYSE:SLG) | 13 | 0 | 6 |
With the results shown by the aforementioned studies, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Federal Realty Investment Trust (NYSE:FRT) shareholders fit into this picture quite nicely.
