Is it smart to be bullish on W.P. Carey Inc. REIT (NYSE:WPC)?
To many traders, hedge funds are seen as bloated, old financial vehicles of an era lost to time. Although there are In excess of 8,000 hedge funds with their doors open in present day, this site looks at the elite of this group, about 525 funds. Analysts calculate that this group has its hands on the lion’s share of the smart money’s total capital, and by watching their best investments, we’ve discovered a number of investment strategies that have historically outpaced the S&P 500. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 trumped the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Just as useful, bullish insider trading sentiment is a second way to analyze the world of equities. Obviously, there are lots of motivations for an insider to drop shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the impressive potential of this strategy if you know what to do (learn more here).
Furthermore, let’s study the recent info surrounding W.P. Carey Inc. REIT (NYSE:WPC).
How are hedge funds trading W.P. Carey Inc. REIT (NYSE:WPC)?
At Q2’s end, a total of 10 of the hedge funds we track were bullish in this stock, a change of -9% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly.
When using filings from the hedgies we track, John Paulson’s Paulson & Co had the biggest position in W.P. Carey Inc. REIT (NYSE:WPC), worth close to $101.6 million, accounting for 0.7% of its total 13F portfolio. Sitting at the No. 2 spot is Markel Gayner Asset Management, managed by Tom Gayner, which held a $63.1 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Other peers with similar optimism include Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw and Matthew Hulsizer’s PEAK6 Capital Management.
Judging by the fact that W.P. Carey Inc. REIT (NYSE:WPC) has witnessed declining interest from the entirety of the hedge funds we track, we can see that there exists a select few money managers that decided to sell off their full holdings at the end of the second quarter. At the top of the heap, Eric Edidin and Josh Lobel’s Archer Capital Management dumped the largest position of the “upper crust” of funds we monitor, totaling about $29.4 million in stock. Chuck Royce’s fund, Royce & Associates, also sold off its stock, about $19 million worth. These moves are important to note, as total hedge fund interest fell by 1 funds at the end of the second quarter.
What have insiders been doing with W.P. Carey Inc. REIT (NYSE:WPC)?
Bullish insider trading is at its handiest when the company we’re looking at has experienced transactions within the past half-year. Over the last 180-day time period, W.P. Carey Inc. REIT (NYSE:WPC) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to W.P. Carey Inc. REIT (NYSE:WPC). 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 National Retail Properties, Inc. (NYSE:NNN). All of these stocks are in the reit – diversified industry and their market caps match WPC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| MFA Financial, Inc. (NYSE:MFA) | 18 | 0 | 0 |
| Retail Properties of America Inc (NYSE:RPAI) | 8 | 0 | 0 |
| Douglas Emmett, Inc. (NYSE:DEI) | 7 | 0 | 0 |
| Starwood Property Trust, Inc. (NYSE:STWD) | 26 | 0 | 0 |
| National Retail Properties, Inc. (NYSE:NNN) | 16 | 0 | 0 |
Using the results explained by Insider Monkey’s strategies, regular investors should always keep one eye on hedge fund and insider trading sentiment, and W.P. Carey Inc. REIT (NYSE:WPC) shareholders fit into this picture quite nicely.
