Digital Realty Trust, Inc. (NYSE:DLR) was in 10 hedge funds’ portfolio at the end of the fourth quarter of 2012. DLR has experienced a decrease in support from the world’s most elite money managers lately. There were 10 hedge funds in our database with DLR positions at the end of the previous quarter.
To most traders, hedge funds are seen as slow, outdated investment vehicles of yesteryear. While there are greater than 8000 funds in operation at the moment, we choose to focus on the moguls of this club, around 450 funds. It is widely believed that this group has its hands on most of the hedge fund industry’s total asset base, and by paying attention to their best stock picks, we have uncovered a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy beat 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 trumped the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Equally as integral, bullish insider trading sentiment is another way to break down the stock market universe. There are lots of stimuli for a bullish insider to drop shares of his or her company, but only one, very simple reason why they would buy. Many academic studies have demonstrated the market-beating potential of this method if you know where to look (learn more here).
Keeping this in mind, we’re going to take a peek at the key action encompassing Digital Realty Trust, Inc. (NYSE:DLR).
What have hedge funds been doing with Digital Realty Trust, Inc. (NYSE:DLR)?
Heading into 2013, a total of 10 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes considerably.
According to our comprehensive database, Ken Griffin’s Citadel Investment Group had the biggest position in Digital Realty Trust, Inc. (NYSE:DLR), worth close to $38 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by SAC Capital Advisors, managed by Steven Cohen, which held a $22 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Brian Taylor’s Pine River Capital Management, Philippe Laffont’s Coatue Management and Israel Englander’s Millennium Management.
Since Digital Realty Trust, Inc. (NYSE:DLR) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of funds that elected to cut their full holdings heading into 2013. It’s worth mentioning that Christopher Lord’s Criterion Capital said goodbye to the largest stake of the 450+ funds we track, worth an estimated $7 million in stock., and Daniel S. Och of OZ Management was right behind this move, as the fund dumped about $5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Digital Realty Trust, Inc. (NYSE:DLR)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the latest six-month time period, Digital Realty Trust, Inc. (NYSE:DLR) has seen 1 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Digital Realty Trust, Inc. (NYSE:DLR). These stocks are Piedmont Office Realty Trust, Inc. (NYSE:PDM), Kilroy Realty Corp (NYSE:KRC), Alexandria Real Estate Equities Inc (NYSE:ARE), Liberty Property Trust (NYSE:LRY), and Boston Properties, Inc. (NYSE:BXP). This group of stocks are the members of the reit – office industry and their market caps are similar to DLR’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Piedmont Office Realty Trust, Inc. (NYSE:PDM) | 6 | 1 | 0 |
| Kilroy Realty Corp (NYSE:KRC) | 9 | 0 | 2 |
| Alexandria Real Estate Equities Inc (NYSE:ARE) | 10 | 0 | 5 |
| Liberty Property Trust (NYSE:LRY) | 13 | 0 | 6 |
| Boston Properties, Inc. (NYSE:BXP) | 18 | 0 | 3 |
With the results exhibited by the aforementioned tactics, retail investors should always pay attention to hedge fund and insider trading sentiment, and Digital Realty Trust, Inc. (NYSE:DLR) shareholders fit into this picture quite nicely.
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