Hedge Funds Are Dumping Alexander & Baldwin Inc (ALEX)

Alexander & Baldwin Inc (NYSE:ALEX) has experienced a decrease in activity from the world’s largest hedge funds lately.

If you’d ask most traders, hedge funds are seen as unimportant, outdated investment vehicles of the past. While there are over 8000 funds in operation today, we at Insider Monkey hone in on the aristocrats of this club, about 450 funds. It is estimated that this group has its hands on the lion’s share of the smart money’s total asset base, and by watching their highest performing picks, we have discovered a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outpaced 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 all of our picks from August).

Equally as beneficial, positive insider trading activity is a second way to break down the investments you’re interested in. There are lots of motivations for a bullish insider to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this strategy if investors understand what to do (learn more here).

Keeping this in mind, we’re going to take a look at the latest action encompassing Alexander & Baldwin Inc (NYSE:ALEX).

How are hedge funds trading Alexander & Baldwin Inc (NYSE:ALEX)?

At year’s end, a total of 7 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes significantly.

Of the funds we track, Richard McGuire’s Marcato Capital Management had the largest position in Alexander & Baldwin Inc (NYSE:ALEX), worth close to $55.8 million, comprising 7.3% of its total 13F portfolio. On Marcato Capital Management’s heels is Royce & Associates, managed by Chuck Royce, which held a $14.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies and Steven Cohen’s SAC Capital Advisors.

Due to the fact that Alexander & Baldwin Inc (NYSE:ALEX) has experienced bearish sentiment from the smart money, it’s safe to say that there were a few fund managers that elected to cut their positions entirely heading into 2013. Interestingly, Bill Ackman’s Pershing Square sold off the biggest position of the 450+ funds we key on, worth about $41.5 million in stock.. SAC Subsidiary’s fund, Sigma Capital Management, also sold off its stock, about $0.9 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about Alexander & Baldwin Inc (NYSE:ALEX)?

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, Alexander & Baldwin Inc (NYSE:ALEX) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Alexander & Baldwin Inc (NYSE:ALEX). These stocks are Forestar Group Inc. (NYSE:FOR), American Realty Capital Properties Inc (NASDAQ:ARCP), Gazit-Globe Ltd. (NYSE:GZT), The St. Joe Company (NYSE:JOE), and Brookfield Residential Properties Inc (NYSE:BRP). All of these stocks are in the real estate development industry and their market caps are closest to ALEX’s market cap.

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With the results demonstrated by Insider Monkey’s studies, everyday investors must always monitor hedge fund and insider trading sentiment, and Alexander & Baldwin Inc (NYSE:ALEX) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds