Is Boston Properties, Inc. (BXP) Going to Burn These Hedge Funds?

Boston Properties, Inc. (NYSE:BXP) investors should be aware of a decrease in activity from the world’s largest hedge funds lately.

To most stock holders, hedge funds are seen as worthless, outdated investment tools of years past. While there are more than 8000 funds in operation today, we at Insider Monkey hone in on the leaders of this club, close to 450 funds. It is widely believed that this group oversees the majority of the smart money’s total asset base, and by monitoring their highest performing equity investments, we have formulated a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Just as integral, positive insider trading activity is a second way to parse down the financial markets. Just as you’d expect, there are lots of stimuli for an executive to cut shares of his or her company, but just one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this strategy if you know where to look (learn more here).

Now, we’re going to take a look at the latest action regarding Boston Properties, Inc. (NYSE:BXP).

How have hedgies been trading Boston Properties, Inc. (NYSE:BXP)?

In preparation for this quarter, a total of 21 of the hedge funds we track were long in this stock, a change of 0% from the first quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, Jeffrey Furber’s AEW Capital Management had the biggest position in Boston Properties, Inc. (NYSE:BXP), worth close to $209.4 million, accounting for 5.2% of its total 13F portfolio. On AEW Capital Management’s heels is D. E. Shaw of D E Shaw, with a $135.2 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Ken Griffin’s Citadel Investment Group, Clint Carlson’s Carlson Capital and Jim Simons’s Renaissance Technologies.

Because Boston Properties, Inc. (NYSE:BXP) has witnessed a declination in interest from hedge fund managers, we can see that there exists a select few hedgies that slashed their full holdings in Q1. At the top of the heap, Daniel S. Och’s OZ Management cut the biggest position of the 450+ funds we track, valued at close to $13.5 million in stock., and Richard Driehaus of Driehaus Capital was right behind this move, as the fund dropped about $8.9 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Insider trading activity in Boston Properties, Inc. (NYSE:BXP)

Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time frame, Boston Properties, Inc. (NYSE:BXP) has seen zero unique insiders buying, and 5 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Boston Properties, Inc. (NYSE:BXP). 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 Digital Realty Trust, Inc. (NYSE:DLR). This group of stocks are the members of the reit – office industry and their market caps are similar to BXP’s market cap.