Hedge Funds Are Selling Equity Residential (EQR)

In the financial world, there are a multitude of gauges investors can use to watch the equity markets. A couple of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top hedge fund managers can outclass the market by a very impressive margin (see just how much).

Just as useful, optimistic insider trading activity is another way to look at the investments you’re interested in. Obviously, there are many stimuli for a bullish insider to sell shares of his or her company, but only one, very simple reason why they would buy. Many academic studies have demonstrated the useful potential of this strategy if you know what to do (learn more here).

Now that that’s out of the way, we’re going to examine the latest info about Equity Residential (NYSE:EQR).

How have hedgies been trading Equity Residential (NYSE:EQR)?

At Q2’s end, a total of 22 of the hedge funds we track held long positions in this stock, a change of -15% from the first quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes substantially.

When using filings from the hedgies we track, Jeffrey Furber’s AEW Capital Management had the largest position in Equity Residential (NYSE:EQR), worth close to $257.5 million, accounting for 6.7% of its total 13F portfolio. Coming in second is D. E. Shaw of D E Shaw, with a $160.9 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Clint Carlson’s Carlson Capital, Ken Griffin’s Citadel Investment Group and Howard Guberman’s Gruss Asset Management.

As Equity Residential (NYSE:EQR) has experienced declining interest from upper-tier hedge fund managers, we can see that there is a sect of funds that elected to cut their full holdings heading into Q2. Intriguingly, Christian Leone’s Luxor Capital Group cut the largest position of all the hedgies we monitor, comprising an estimated $83.8 million in stock, and John Khoury of Long Pond Capital was right behind this move, as the fund said goodbye to about $77.1 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 4 funds heading into Q2.

How have insiders been trading Equity Residential (NYSE:EQR)?

Legal insider trading, particularly when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past 180 days. Over the last half-year time period, Equity Residential (NYSE:EQR) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Equity Residential (NYSE:EQR). These stocks are Camden Property Trust (NYSE:CPT), UDR, Inc. (NYSE:UDR), Plum Creek Timber Co. Inc. (NYSE:PCL), American Capital Agency Corp. (NASDAQ:AGNC), and AvalonBay Communities Inc (NYSE:AVB). All of these stocks are in the reit – residential industry and their market caps are similar to EQR’s market cap.

Using the results demonstrated by the previously mentioned analyses, average investors must always watch hedge fund and insider trading activity, and Equity Residential (NYSE:EQR) shareholders fit into this picture quite nicely.

Discover how hedge fund piggybacking can benefit you