Is Chesapeake Lodging Trust (CHSP) Going to Burn These Hedge Funds?

Chesapeake Lodging Trust (NYSE:CHSP) was in 6 hedge funds’ portfolio at the end of December. CHSP shareholders have witnessed a decrease in hedge fund sentiment of late. There were 8 hedge funds in our database with CHSP holdings at the end of the previous quarter.

To the average investor, there are many methods investors can use to watch the equity markets. Some of the most useful are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best money managers can outpace the S&P 500 by a superb amount (see just how much).

Just as beneficial, optimistic insider trading activity is a second way to break down the financial markets. Obviously, there are a variety of incentives for an executive to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this tactic if you understand what to do (learn more here).

Now, we’re going to take a gander at the key action surrounding Chesapeake Lodging Trust (NYSE:CHSP).

How are hedge funds trading Chesapeake Lodging Trust (NYSE:CHSP)?

At year’s end, a total of 6 of the hedge funds we track held long positions in this stock, a change of -25% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly.

Of the funds we track, Capital Growth Management, managed by Ken Heebner, holds the largest position in Chesapeake Lodging Trust (NYSE:CHSP). Capital Growth Management has a $18.4 million position in the stock, comprising 0.5% of its 13F portfolio. On Capital Growth Management’s heels is D E Shaw, managed by D. E. Shaw, which held a $4.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Cliff Asness’s AQR Capital Management, J. Alan Reid, Jr.’s Forward Management and John Overdeck and David Siegel’s Two Sigma Advisors.

Due to the fact that Chesapeake Lodging Trust (NYSE:CHSP) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few fund managers that slashed their positions entirely heading into 2013. Intriguingly, Mike Vranos’s Ellington cut the biggest position of the “upper crust” of funds we key on, valued at an estimated $0.6 million in stock.. Jim Simons’s fund, Renaissance Technologies, also dumped its stock, about $0.6 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 2 funds heading into 2013.

What do corporate executives and insiders think about Chesapeake Lodging Trust (NYSE:CHSP)?

Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has experienced transactions within the past half-year. Over the last six-month time frame, Chesapeake Lodging Trust (NYSE:CHSP) has experienced 1 unique insiders purchasing, and zero 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 Chesapeake Lodging Trust (NYSE:CHSP). These stocks are DiamondRock Hospitality Company (NYSE:DRH), Strategic Hotels and Resorts Inc (NYSE:BEE), FelCor Lodging Trust Incorporated (NYSE:FCH), Pebblebrook Hotel Trust (NYSE:PEB), and Ashford Hospitality Trust, Inc. (NYSE:AHT). This group of stocks are the members of the reit – hotel/motel industry and their market caps are similar to CHSP’s market cap.

With the results shown by the aforementioned studies, retail investors should always watch hedge fund and insider trading sentiment, and Chesapeake Lodging Trust (NYSE:CHSP) is an important part of this process.

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