Is Corporate Office Properties Trust (OFC) Going to Burn These Hedge Funds?

There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Corporate Office Properties Trust (NYSE:OFC).

Corporate Office Properties Trust (NYSE:OFC) shareholders have witnessed a decrease in support from the world’s most elite money managers of late. Corporate Office Properties Trust (NYSE:OFC) was in 16 hedge funds’ portfolios at the end of the third quarter of 2015. There were 18 hedge funds in our database with Corporate Office Properties Trust (NYSE:OFC) holdings at the end of the previous quarter. At the end of this article, we will also compare Corporate Office Properties Trust (NYSE:OFC) to other stocks including Glacier Bancorp, Inc. (NASDAQ:GBCI), Nord Anglia Education Inc (NYSE:NORD), and Suburban Propane Partners LP (NYSE:SPH) to get a better sense of its popularity.

In today’s marketplace, there are a large number of indicators shareholders employ to evaluate their holdings. A pair of the most useful indicators are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the elite hedge fund managers can outclass the S&P 500 by a very impressive amount (see the details here).

Now, we’re going to take a peek at the new action regarding Corporate Office Properties Trust (NYSE:OFC).

How have hedgies been trading Corporate Office Properties Trust (NYSE:OFC)?

Heading into Q4, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 11% from the second quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies holds the most valuable position in Corporate Office Properties Trust (NYSE:OFC). Renaissance Technologies has a $26.6 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Lee Munder Capital Group, managed by Lee Munder, which holds a $22.4 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish include Ken Fisher’s Fisher Asset Management, Israel Englander’s Millennium Management, and D E Shaw.

Due to the fact that Corporate Office Properties Trust (NYSE:OFC) has faced a bearish sentiment from the smart money, logic holds that there exists a select few money managers that decided to sell off their positions entirely heading into Q4. At the top of the heap, Peter Muller’s PDT Partners dumped the biggest stake of the 700 funds tracked by Insider Monkey, worth an estimated $0.9 million in stock. Jacob Gottlieb’s fund, Visium Asset Management, also sold off its stock, about $0.2 million worth of shares. These moves are important to note, as aggregate hedge fund interest fell by 2 funds heading into Q4.

Let’s go over hedge fund activity in other stocks similar to Corporate Office Properties Trust (NYSE:OFC). These stocks are Glacier Bancorp, Inc. (NASDAQ:GBCI), Nord Anglia Education Inc (NYSE:NORD), Suburban Propane Partners LP (NYSE:SPH), and Kennametal Inc. (NYSE:KMT). This group of stocks’ market values resembles Corporate Office Properties Trust (NYSE:OFC)’s market value.

As you can see, these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $199 million. That figure was $100 million in Corporate Office Properties Trust (NYSE:OFC)’s case. Kennametal Inc. (NYSE:KMT) is the most popular stock in this table. On the other hand, Suburban Propane Partners LP (NYSE:SPH) is the least popular one with only 6 bullish hedge fund positions. Corporate Office Properties Trust (NYSE:OFC) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Kennametal Inc. (NYSE:KMT) might be a better candidate to consider a long position.