We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Ackman’s recent Valeant losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards American Residential Properties Inc (NYSE:ARPI).
American Residential Properties Inc (NYSE:ARPI) was in 11 hedge funds’ portfolios at the end of September. American Residential Properties Inc (NYSE:ARPI) has experienced a decrease in support from the world’s most elite money managers recently. There were 15 hedge funds in our database with American Residential Properties Inc (NYSE:ARPI) holdings at the end of the previous quarter. At the end of this article, we will also compare American Residential Properties Inc (NYSE:ARPI) to other stocks, including TrustCo Bank Corp NY (NASDAQ:TRST), Air Transport Services Group Inc. (NASDAQ:ATSG), and Sapiens International Corporation N.V. (NASDAQ:SPNS) to get a better sense of its popularity.
Follow American Residential Properties Inc. (NYSE:ARPI)
Follow American Residential Properties Inc. (NYSE:ARPI)
According to most investors, hedge funds are seen as slow, outdated investment vehicles of yesteryear. While there are more than an 8000 funds trading at present, We hone in on the leaders of this club, about 700 funds. It is estimated that this group of investors watches over most of the smart money’s total asset base, and by keeping an eye on their best investments, Insider Monkey has deciphered numerous investment strategies that have historically outstripped the broader indices. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Keeping this in mind, let’s review the fresh action encompassing American Residential Properties Inc (NYSE:ARPI).
What does the smart money think about American Residential Properties Inc (NYSE:ARPI)?
Heading into Q4, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a decrease of 27% from the second quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Scopia Capital, managed by Matt Sirovich and Jeremy Mindich, holds the number one position in American Residential Properties Inc (NYSE:ARPI). Scopia Capital has a $54.4 million position in the stock, comprising 1.2% of its 13F portfolio. The second most bullish fund manager is John Khoury of Long Pond Capital, with a $29 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism comprise J. Alan Reid, Jr.’s Forward Management, Ken Griffin’s Citadel Investment Group, and Michael Murphy and Daniel Donoghue’s Discovery Group.
Due to the fact that American Residential Properties Inc (NYSE:ARPI) has experienced falling interest from the aggregate hedge fund industry, we can see that there were a few hedge funds who were dropping their full holdings last quarter. At the top of the heap, Richard Driehaus’ Driehaus Capital cut the biggest stake of all the hedgies followed by Insider Monkey, valued at an estimated $4.1 million in stock. Rod Hinze’s fund, KeyPoint Capital Management, also dropped its stock, about $3.5 million worth of shares. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 4 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as American Residential Properties Inc (NYSE:ARPI) but similarly valued. We will take a look at TrustCo Bank Corp NY (NASDAQ:TRST), Air Transport Services Group Inc. (NASDAQ:ATSG), Sapiens International Corporation N.V. (NASDAQ:SPNS), and Bryn Mawr Bank Corp. (NASDAQ:BMTC). All of these stocks’ market caps resemble American Residential Properties Inc (NYSE:ARPI)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TRST | 8 | 60752 | 4 |
| ATSG | 19 | 196825 | -3 |
| SPNS | 10 | 27572 | 4 |
| BMTC | 8 | 32216 | -1 |
As you can see, these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $145 million in American Residential Properties Inc (NYSE:ARPI)’s case. Air Transport Services Group Inc. (NASDAQ:ATSG) is the most popular stock in this table. On the other hand, TrustCo Bank Corp NY (NASDAQ:TRST) is the least popular one with only an 8 bullish hedge fund positions. American Residential Properties Inc (NYSE:ARPI) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Air Transport Services Group Inc. (NASDAQ:ATSG) might be a better candidate to consider a long position.
