Is Post Properties Inc (NYSE:PPS) a buy, sell, or hold? Investors who are in the know are becoming less confident. The number of long hedge fund positions dropped by 3 in recent months.
If you’d ask most shareholders, hedge funds are perceived as unimportant, old financial vehicles of years past. While there are over 8000 funds in operation at the moment, we choose to focus on the aristocrats of this group, close to 450 funds. It is estimated that this group oversees the lion’s share of all hedge funds’ total capital, and by paying attention to their best equity investments, we have found a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Just as beneficial, bullish insider trading sentiment is a second way to parse down the marketplace. As the old adage goes: there are plenty of reasons for a corporate insider to downsize shares of his or her company, but only one, very clear reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this tactic if investors understand what to do (learn more here).
Keeping this in mind, it’s important to take a gander at the latest action regarding Post Properties Inc (NYSE:PPS).
Hedge fund activity in Post Properties Inc (NYSE:PPS)
At year’s end, a total of 10 of the hedge funds we track were bullish in this stock, a change of -23% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially.
When looking at the hedgies we track, Carlson Capital, managed by Clint Carlson, holds the most valuable position in Post Properties Inc (NYSE:PPS). Carlson Capital has a $43 million position in the stock, comprising 0.7% of its 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $29 million position; the fund has 0% of its 13F portfolio invested in the stock. Other peers that are bullish include Jim Simons’s Renaissance Technologies, John Overdeck and David Siegel’s Two Sigma Advisors and Israel Englander’s Millennium Management.
Because Post Properties Inc (NYSE:PPS) has witnessed falling interest from the smart money, it’s safe to say that there is a sect of hedge funds who sold off their entire stakes in Q4. Interestingly, Ken Heebner’s Capital Growth Management cut the largest investment of the “upper crust” of funds we track, comprising about $41 million in stock.. Ben Levine, Andrew Manuel and Stefan Renold’s fund, LMR Partners, also said goodbye to its stock, about $1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 3 funds in Q4.
Insider trading activity in Post Properties Inc (NYSE:PPS)
Bullish insider trading is at its handiest when the company in question has seen transactions within the past six months. Over the last half-year time frame, Post Properties Inc (NYSE:PPS) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Post Properties Inc (NYSE:PPS). These stocks are CYS Investments Inc (NYSE:CYS), Equity Lifestyle Properties, Inc. (NYSE:ELS), Mid America Apartment Communities Inc (NYSE:MAA), Hatteras Financial Corp. (NYSE:HTS), and ARMOUR Residential REIT, Inc. (NYSE:ARR). This group of stocks are the members of the reit – residential industry and their market caps resemble PPS’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| CYS Investments Inc (NYSE:CYS) | 14 | 2 | 1 |
| Equity Lifestyle Properties, Inc. (NYSE:ELS) | 10 | 0 | 4 |
| Mid America Apartment Communities Inc (NYSE:MAA) | 7 | 0 | 0 |
| Hatteras Financial Corp. (NYSE:HTS) | 10 | 3 | 0 |
| ARMOUR Residential REIT, Inc. (NYSE:ARR) | 13 | 5 | 0 |
With the returns shown by the aforementioned tactics, everyday investors must always pay attention to hedge fund and insider trading activity, and Post Properties Inc (NYSE:PPS) is no exception.
Click here to learn more about Insider Monkey’s Hedge Fund Newsletter
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.