Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by elite investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
Is Pebblebrook Hotel Trust (NYSE:PEB) a buy right now? The best stock pickers are becoming less confident. The number of bullish hedge fund bets decreased by 2 in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Janus Capital Group Inc (NYSE:JNS), Regal-Beloit Corporation (NYSE:RBC), and The Medicines Company (NASDAQ:MDCO) to gather more data points.
Follow Pebblebrook Hotel Trust (NYSE:PEB)
Follow Pebblebrook Hotel Trust (NYSE:PEB)
Keeping this in mind, we’re going to view the latest action surrounding Pebblebrook Hotel Trust (NYSE:PEB).
Hedge fund activity in Pebblebrook Hotel Trust (NYSE:PEB)
At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Greg Poole’s Echo Street Capital Management has the most valuable position in Pebblebrook Hotel Trust (NYSE:PEB), worth close to $11.6 million, comprising 0.4% of its total 13F portfolio. Sitting at the No. 2 spot is Clinton Group, managed by George Hall, which holds an $0.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that are bullish comprise Cliff Asness’s AQR Capital Management, Jacob Gottlieb’s Visium Asset Management and Matthew Hulsizer’s PEAK6 Capital Management.
Seeing as Pebblebrook Hotel Trust (NYSE:PEB) has experienced a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of hedgies that elected to cut their positions entirely by the end of the third quarter. At the top of the heap, Richard Driehaus’ Driehaus Capital cut the largest position of all the hedgies tracked by Insider Monkey, valued at about $3.5 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dumped about $1.5 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 2 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Pebblebrook Hotel Trust (NYSE:PEB) but similarly valued. We will take a look at Janus Capital Group Inc (NYSE:JNS),Regal-Beloit Corporation (NYSE:RBC), The Medicines Company (NASDAQ:MDCO), and NorthWestern Corp (NYSE:NWE). This group of stocks’ market valuations are closest to PEB’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JNS | 20 | 342201 | -1 |
| RBC | 20 | 222895 | -2 |
| MDCO | 19 | 809032 | -1 |
| NWE | 12 | 62313 | 3 |
As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $359 million. That figure was $13 million in PEB’s case. Janus Capital Group Inc (NYSE:JNS) is the most popular stock in this table. On the other hand NorthWestern Corp (NYSE:NWE) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Pebblebrook Hotel Trust (NYSE:PEB) is even less popular than NWE. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
