Is Pebblebrook Hotel Trust (NYSE:PEB) a first-rate investment today? The smart money is turning less bullish. The number of bullish hedge fund positions fell by 1 lately.
In the eyes of most market participants, hedge funds are perceived as unimportant, old investment tools of yesteryear. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey hone in on the leaders of this group, about 450 funds. It is widely believed that this group controls the lion’s share of the hedge fund industry’s total asset base, and by tracking their top stock picks, we have determined a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as beneficial, bullish insider trading activity is another way to break down the world of equities. Obviously, there are plenty of stimuli for an insider to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this strategy if you know what to do (learn more here).
Consequently, let’s take a look at the recent action regarding Pebblebrook Hotel Trust (NYSE:PEB).
Hedge fund activity in Pebblebrook Hotel Trust (NYSE:PEB)
In preparation for this year, a total of 7 of the hedge funds we track held long positions in this stock, a change of -13% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings significantly.
Of the funds we track, Jane Mendillo’s Harvard Management Co had the most valuable position in Pebblebrook Hotel Trust (NYSE:PEB), worth close to $54.2 million, comprising 5.1% of its total 13F portfolio. The second largest stake is held by Jeffrey Furber of AEW Capital Management, with a $11.7 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and John Overdeck and David Siegel’s Two Sigma Advisors.
Because Pebblebrook Hotel Trust (NYSE:PEB) has faced falling interest from the aggregate hedge fund industry, we can see that there lies a certain “tier” of money managers who sold off their positions entirely heading into 2013. Intriguingly, Ken Heebner’s Capital Growth Management sold off the biggest position of all the hedgies we key on, totaling about $49.5 million in stock.. Ken Griffin’s fund, Citadel Investment Group, also cut its stock, about $0.8 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 1 funds heading into 2013.
What have insiders been doing with Pebblebrook Hotel Trust (NYSE:PEB)?
Insider purchases made by high-level executives is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the latest six-month time period, Pebblebrook Hotel Trust (NYSE:PEB) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Pebblebrook Hotel Trust (NYSE:PEB). These stocks are LaSalle Hotel Properties (NYSE:LHO), Chesapeake Lodging Trust (NYSE:CHSP), Sunstone Hotel Investors Inc (NYSE:SHO), DiamondRock Hospitality Company (NYSE:DRH), and Strategic Hotels and Resorts Inc (NYSE:BEE). This group of stocks are the members of the reit – hotel/motel industry and their market caps are closest to PEB’s market cap.
