Is Northstar Realty Finance Corp. (NYSE:NRF) a good investment?
Now, according to many investors, hedge funds are viewed as bloated, outdated investment tools of an era lost to time. Although there are over 8,000 hedge funds trading today, this site looks at the leaders of this group, close to 525 funds. Analysts calculate that this group controls the majority of all hedge funds’ total assets, and by keeping an eye on their best investments, we’ve spotted a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year 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 outpaced the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Just as necessary, optimistic insider trading activity is another way to look at the financial markets. There are a variety of reasons for an upper level exec to drop shares of his or her company, but only one, very clear reason why they would buy. Many academic studies have demonstrated the impressive potential of this strategy if piggybackers understand what to do (learn more here).
Keeping this in mind, let’s discuss the recent info about Northstar Realty Finance Corp. (NYSE:NRF).
How have hedgies been trading Northstar Realty Finance Corp. (NYSE:NRF)?
At Q2’s end, a total of 23 of the hedge funds we track were long in this stock, a change of -8% from the previous quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes substantially.
Out of the hedge funds we follow, Bain Capital’s Brookside Capital had the most valuable position in Northstar Realty Finance Corp. (NYSE:NRF), worth close to $94.8 million, comprising 2.2% of its total 13F portfolio. Coming in second is York Capital Management, managed by James Dinan, which held a $60.3 million position; 1.3% of its 13F portfolio is allocated to the stock. Some other hedge funds with similar optimism include Anand Parekh’s Alyeska Investment Group, Robert Pohly’s Samlyn Capital and Israel Englander’s Millennium Management.
As Northstar Realty Finance Corp. (NYSE:NRF) has faced a fall in interest from upper-tier hedge fund managers, it’s safe to say that there was a specific group of hedge funds that slashed their full holdings heading into Q2. It’s worth mentioning that J. Alan Reid, Jr.’s Forward Management cut the largest position of the “upper crust” of funds we key on, totaling close to $1 million in stock, and Bill Miller of Legg Mason Capital Management was right behind this move, as the fund dumped about $0.9 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds heading into Q2.
How have insiders been trading Northstar Realty Finance Corp. (NYSE:NRF)?
Bullish insider trading is particularly usable when the company in question has seen transactions within the past six months. Over the last six-month time period, Northstar Realty Finance Corp. (NYSE:NRF) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators in other stocks similar to Northstar Realty Finance Corp. (NYSE:NRF). These stocks are Equity One, Inc. (NYSE:EQY), EPR Properties (NYSE:EPR), Glimcher Realty Trust (NYSE:GRT), Alexander’s, Inc. (NYSE:ALX), and Washington Real Estate Investment Trust (NYSE:WRE). This group of stocks belong to the reit – retail industry and their market caps match NRF’s market cap.
