To most investors, hedge funds are assumed to be slow, outdated financial tools of years past. While there are greater than 8000 funds in operation today, we hone in on the moguls of this group, around 450 funds. Most estimates calculate that this group has its hands on most of the hedge fund industry’s total asset base, and by paying attention to their best equity investments, we have formulated a few investment strategies that have historically beaten the broader indices. 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 began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as key, optimistic insider trading activity is a second way to parse down the marketplace. Obviously, there are plenty of motivations for an insider to cut shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this strategy if investors know where to look (learn more here).
Consequently, we’re going to take a peek at the latest action surrounding Sun Communities Inc (NYSE:SUI).
How are hedge funds trading Sun Communities Inc (NYSE:SUI)?
Heading into Q2, a total of 7 of the hedge funds we track were bullish in this stock, a change of 40% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes significantly.
According to our comprehensive database, J. Alan Reid, Jr.’s Forward Management had the biggest position in Sun Communities Inc (NYSE:SUI), worth close to $20.8 million, accounting for 1.3% of its total 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which held a $9.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Ken Griffin’s Citadel Investment Group, Cliff Asness’s AQR Capital Management and Israel Englander’s Millennium Management.
As aggregate interest increased, specific money managers have jumped into Sun Communities Inc (NYSE:SUI) headfirst. Millennium Management, managed by Israel Englander, initiated the largest position in Sun Communities Inc (NYSE:SUI). Millennium Management had 2.5 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $1.9 million investment in the stock during the quarter.
How have insiders been trading Sun Communities Inc (NYSE:SUI)?
Bullish insider trading is best served when the company in question has experienced transactions within the past 180 days. Over the last half-year time frame, Sun Communities Inc (NYSE:SUI) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Sun Communities Inc (NYSE:SUI). These stocks are Post Properties Inc (NYSE:PPS), ARMOUR Residential REIT, Inc. (NYSE:ARR), CYS Investments Inc (NYSE:CYS), PennyMac Mortgage Investment Trust (NYSE:PMT), and Colonial Properties Trust Inc (NYSE:CLP). This group of stocks are the members of the reit – residential industry and their market caps resemble SUI’s market cap.
