National Retail Properties, Inc. (NNN): Hedge Funds and Insiders Are Bearish, What Should You Do?

Is National Retail Properties, Inc. (NYSE:NNN) a bargain? Hedge funds are selling. The number of bullish hedge fund positions stayed the same which is a slightly negative development in our experience

In the financial world, there are tons of gauges market participants can use to watch stocks. Two of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best investment managers can outperform the S&P 500 by a solid amount (see just how much).

Equally as key, positive insider trading activity is another way to break down the marketplace. Just as you’d expect, there are lots of incentives for a bullish insider to cut shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this tactic if shareholders understand what to do (learn more here).

With these “truths” under our belt, let’s take a peek at the latest action surrounding National Retail Properties, Inc. (NYSE:NNN).

What have hedge funds been doing with National Retail Properties, Inc. (NYSE:NNN)?

At the end of the first quarter, a total of 10 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings meaningfully.

When looking at the hedgies we track, Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in National Retail Properties, Inc. (NYSE:NNN). Fisher Asset Management has a $43.1 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Jeffrey Furber of AEW Capital Management, with a $36.8 million position; 0.9% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include Chuck Royce’s Royce & Associates, Dmitry Balyasny’s Balyasny Asset Management and Cliff Asness’s AQR Capital Management.

Because National Retail Properties, Inc. (NYSE:NNN) has witnessed a declination in interest from the smart money, it’s safe to say that there were a few hedge funds who sold off their positions entirely last quarter. It’s worth mentioning that Jim Simons’s Renaissance Technologies dumped the biggest investment of the “upper crust” of funds we monitor, totaling an estimated $14.3 million in stock., and Israel Englander of Millennium Management was right behind this move, as the fund said goodbye to about $5.3 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading National Retail Properties, Inc. (NYSE:NNN)?

Insider buying is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the last six-month time period, National Retail Properties, Inc. (NYSE:NNN) has experienced zero unique insiders buying, and 6 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to National Retail Properties, Inc. (NYSE:NNN). These stocks are MFA Financial, Inc. (NYSE:MFA), Retail Properties of America Inc (NYSE:RPAI), Douglas Emmett, Inc. (NYSE:DEI), Starwood Property Trust, Inc. (NYSE:STWD), and W.P. Carey Inc. REIT (NYSE:WPC). All of these stocks are in the reit – diversified industry and their market caps are similar to NNN’s market cap.

With the results demonstrated by our studies, everyday investors should always monitor hedge fund and insider trading activity, and National Retail Properties, Inc. (NYSE:NNN) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds