This Metric Says You Are Smart to Sell FelCor Lodging Trust Incorporated (FCH)

FelCor Lodging Trust Incorporated (NYSE:FCH) was in 15 hedge funds’ portfolio at the end of March. FCH shareholders have witnessed a decrease in hedge fund sentiment lately. There were 17 hedge funds in our database with FCH holdings at the end of the previous quarter.

In the 21st century investor’s toolkit, there are plenty of metrics investors can use to monitor stocks. A pair of the best are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best money managers can outperform the broader indices by a solid amount (see just how much).

Equally as key, positive insider trading activity is a second way to parse down the marketplace. Just as you’d expect, there are a variety of reasons for an insider to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this method if investors understand what to do (learn more here).

With these “truths” under our belt, we’re going to take a glance at the recent action surrounding FelCor Lodging Trust Incorporated (NYSE:FCH).

How have hedgies been trading FelCor Lodging Trust Incorporated (NYSE:FCH)?

Heading into Q2, a total of 15 of the hedge funds we track were bullish in this stock, a change of -12% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, J. Alan Reid, Jr.’s Forward Management had the biggest position in FelCor Lodging Trust Incorporated (NYSE:FCH), worth close to $31.1 million, accounting for 1.9% of its total 13F portfolio. Sitting at the No. 2 spot is John Paulson of Paulson & Co, with a $29.8 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers that are bullish include Don Morgan’s Brigade Capital, D. E. Shaw’s D E Shaw and Greg Poole’s Echo Street Capital Management.

Judging by the fact that FelCor Lodging Trust Incorporated (NYSE:FCH) has experienced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few hedge funds that decided to sell off their full holdings in Q1. Interestingly, Joel Ramin’s 12 West Capital Management sold off the largest position of the 450+ funds we key on, totaling about $17.3 million in stock.. Jacob Gottlieb’s fund, Visium Asset Management, also cut its stock, about $1.3 million worth. These moves are important to note, as total hedge fund interest fell by 2 funds in Q1.

How have insiders been trading FelCor Lodging Trust Incorporated (NYSE:FCH)?

Insider buying is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the latest 180-day time frame, FelCor Lodging Trust Incorporated (NYSE:FCH) has experienced 5 unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to FelCor Lodging Trust Incorporated (NYSE:FCH). These stocks are Chatham Lodging Trust (NYSE:CLDT), Strategic Hotels and Resorts Inc (NYSE:BEE), Pebblebrook Hotel Trust (NYSE:PEB), Chesapeake Lodging Trust (NYSE:CHSP), and Ashford Hospitality Trust, Inc. (NYSE:AHT). This group of stocks are in the reit – hotel/motel industry and their market caps match FCH’s market cap.

With the returns demonstrated by the aforementioned research, everyday investors must always monitor hedge fund and insider trading sentiment, and FelCor Lodging Trust Incorporated (NYSE:FCH) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds