Is it smart to be bullish on Realty Income Corp (NYSE:O)?
To the average investor, there are a multitude of methods investors can use to watch publicly traded companies. A pair of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best money managers can outperform the market by a healthy amount (see just how much).
Just as useful, optimistic insider trading activity is another way to analyze the financial markets. Obviously, there are a variety of reasons for a bullish insider to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this method if shareholders know what to do (learn more here).
Thus, it’s important to examine the latest info surrounding Realty Income Corp (NYSE:O).
What have hedge funds been doing with Realty Income Corp (NYSE:O)?
At Q2’s end, a total of 12 of the hedge funds we track were bullish in this stock, a change of 33% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings substantially.
Out of the hedge funds we follow, Jim Simons’s Renaissance Technologies had the biggest position in Realty Income Corp (NYSE:O), worth close to $43.7 million, comprising 0.1% of its total 13F portfolio. Coming in second is PEAK6 Capital Management, managed by Matthew Hulsizer, which held a $6.9 million call position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.
Consequently, certain money managers have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, established the biggest position in Realty Income Corp (NYSE:O). Renaissance Technologies had 43.7 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $6.9 million position during the quarter. The other funds with new positions in the stock are Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management, and D. E. Shaw’s D E Shaw.
What do corporate executives and insiders think about Realty Income Corp (NYSE:O)?
Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past half-year. Over the latest 180-day time frame, Realty Income Corp (NYSE:O) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to Realty Income Corp (NYSE:O). These stocks are DDR Corp (NYSE:DDR), Federal Realty Investment Trust (NYSE:FRT), SL Green Realty Corp (NYSE:SLG), Kimco Realty Corp (NYSE:KIM), and Macerich Co (NYSE:MAC). This group of stocks are in the reit – retail industry and their market caps are closest to O’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| DDR Corp (NYSE:DDR) | 15 | 0 | 0 |
| Federal Realty Investment Trust (NYSE:FRT) | 15 | 0 | 0 |
| SL Green Realty Corp (NYSE:SLG) | 15 | 0 | 0 |
| Kimco Realty Corp (NYSE:KIM) | 11 | 0 | 0 |
| Macerich Co (NYSE:MAC) | 13 | 0 | 0 |
Using the results demonstrated by the previously mentioned strategies, regular investors should always keep one eye on hedge fund and insider trading activity, and Realty Income Corp (NYSE:O) is no exception.
