RLJ Lodging Trust (NYSE:RLJ) was in 10 hedge funds’ portfolio at the end of the fourth quarter of 2012. RLJ has experienced an increase in activity from the world’s largest hedge funds lately. There were 8 hedge funds in our database with RLJ positions at the end of the previous quarter.
At the moment, there are many methods market participants can use to analyze the equity markets. A pair of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can trounce their index-focused peers by a very impressive amount (see just how much).
Equally as important, positive insider trading sentiment is a second way to parse down the stock market universe. As the old adage goes: there are a number of reasons for an executive to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the useful potential of this method if investors understand where to look (learn more here).
Now, it’s important to take a gander at the recent action surrounding RLJ Lodging Trust (NYSE:RLJ).
How are hedge funds trading RLJ Lodging Trust (NYSE:RLJ)?
In preparation for this year, a total of 10 of the hedge funds we track were bullish in this stock, a change of 25% from the third quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings substantially.
According to our comprehensive database, Ken Heebner’s Capital Growth Management had the most valuable position in RLJ Lodging Trust (NYSE:RLJ), worth close to $74 million, accounting for 1.9% of its total 13F portfolio. Coming in second is AEW Capital Management, managed by Jeffrey Furber, which held a $32 million position; 0.2% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include D. E. Shaw’s D E Shaw, John Overdeck and David Siegel’s Two Sigma Advisors and Cliff Asness’s AQR Capital Management.
Now, some big names were leading the bulls’ herd. Alyeska Investment Group, managed by Anand Parekh, initiated the most valuable call position in RLJ Lodging Trust (NYSE:RLJ). Alyeska Investment Group had 4 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $3 million investment in the stock during the quarter. The only other fund with a new position in the stock is Steven Cohen’s SAC Capital Advisors.
How are insiders trading RLJ Lodging Trust (NYSE:RLJ)?
Insider buying is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the last six-month time frame, RLJ Lodging Trust (NYSE:RLJ) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to RLJ Lodging Trust (NYSE:RLJ). These stocks are Pebblebrook Hotel Trust (NYSE:PEB), Strategic Hotels and Resorts Inc (NYSE:BEE), DiamondRock Hospitality Company (NYSE:DRH), Sunstone Hotel Investors Inc (NYSE:SHO), and LaSalle Hotel Properties (NYSE:LHO). This group of stocks are the members of the reit – hotel/motel industry and their market caps resemble RLJ’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Pebblebrook Hotel Trust (NYSE:PEB) | 7 | 0 | 0 |
| Strategic Hotels and Resorts Inc (NYSE:BEE) | 13 | 0 | 0 |
| DiamondRock Hospitality Company (NYSE:DRH) | 6 | 0 | 0 |
| Sunstone Hotel Investors Inc (NYSE:SHO) | 16 | 0 | 1 |
| LaSalle Hotel Properties (NYSE:LHO) | 8 | 0 | 1 |
With the results demonstrated by the aforementioned studies, retail investors should always watch hedge fund and insider trading activity, and RLJ Lodging Trust (NYSE:RLJ) applies perfectly to this mantra.
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