Ventas, Inc. (VTR): Are Hedge Funds Right About This Stock?

Ventas, Inc. (NYSE:VTR) investors should pay attention to a decrease in support from the world’s most elite money managers lately.

In the eyes of most stock holders, hedge funds are perceived as unimportant, old financial vehicles of yesteryear. While there are over 8000 funds with their doors open today, we at Insider Monkey look at the elite of this club, about 450 funds. It is widely believed that this group controls the lion’s share of the smart money’s total asset base, and by tracking their best picks, we have come up with a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as beneficial, optimistic insider trading activity is another way to break down the marketplace. As the old adage goes: there are plenty of stimuli for an upper level exec to cut shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the valuable potential of this strategy if you understand what to do (learn more here).

With all of this in mind, we’re going to take a peek at the key action surrounding Ventas, Inc. (NYSE:VTR).

How have hedgies been trading Ventas, Inc. (NYSE:VTR)?

At Q1’s end, a total of 12 of the hedge funds we track were bullish in this stock, a change of -25% from the first quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes significantly.

Of the funds we track, Jeffrey Furber’s AEW Capital Management had the most valuable position in Ventas, Inc. (NYSE:VTR), worth close to $203.9 million, comprising 5.1% of its total 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which held a $98.4 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, Cliff Asness’s AQR Capital Management and David Harding’s Winton Capital Management.

Judging by the fact that Ventas, Inc. (NYSE:VTR) has experienced bearish sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of hedgies who sold off their positions entirely heading into Q2. It’s worth mentioning that Jacob Gottlieb’s Visium Asset Management sold off the biggest investment of all the hedgies we watch, worth about $89.2 million in stock.. Jim Simons’s fund, Renaissance Technologies, also cut its stock, about $6.3 million worth. These moves are important to note, as total hedge fund interest fell by 4 funds heading into Q2.

How are insiders trading Ventas, Inc. (NYSE:VTR)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has experienced transactions within the past six months. Over the latest 180-day time period, Ventas, Inc. (NYSE:VTR) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Ventas, Inc. (NYSE:VTR). These stocks are Healthcare Realty Trust Inc (NYSE:HR), Healthcare Trust Of America Inc (NYSE:HTA), Omega Healthcare Investors Inc (NYSE:OHI), Health Care REIT, Inc. (NYSE:HCN), and HCP, Inc. (NYSE:HCP). This group of stocks are in the reit – healthcare facilities industry and their market caps match VTR’s market cap.

With the results exhibited by our strategies, retail investors must always watch hedge fund and insider trading activity, and Ventas, Inc. (NYSE:VTR) shareholders fit into this picture quite nicely.

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