Apartment Investment and Management Co. (AIV): Insiders Are Dumping, Should You?: Essex Property Trust Inc (ESS), BRE Properties Inc (BRE)

Apartment Investment and Management Co. (NYSE:AIV) was in 12 hedge funds’ portfolio at the end of December. AIV investors should be aware of a decrease in activity from the world’s largest hedge funds in recent months. There were 14 hedge funds in our database with AIV holdings at the end of the previous quarter.

Apartment Investment and Management Co. (NYSE:AIV)In the financial world, there are dozens of methods shareholders can use to monitor Mr. Market. Some of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can beat the S&P 500 by a solid amount (see just how much).

Equally as integral, optimistic insider trading activity is a second way to break down the stock market universe. Just as you’d expect, there are plenty of incentives for an upper level exec to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this tactic if you understand what to do (learn more here).

Consequently, we’re going to take a gander at the recent action encompassing Apartment Investment and Management Co. (NYSE:AIV).

What does the smart money think about Apartment Investment and Management Co. (NYSE:AIV)?

Heading into 2013, a total of 12 of the hedge funds we track were bullish in this stock, a change of -14% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings meaningfully.

When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the most valuable position in Apartment Investment and Management Co. (NYSE:AIV), worth close to $35 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Carlson Capital, managed by Clint Carlson, which held a $17 million position; 0.3% of its 13F portfolio is allocated to the company. Other hedgies that are bullish include John Overdeck and David Siegel’s Two Sigma Advisors, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.

Due to the fact that Apartment Investment and Management Co. (NYSE:AIV) has experienced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of money managers who were dropping their positions entirely last quarter. At the top of the heap, Ken Heebner’s Capital Growth Management dropped the largest investment of the 450+ funds we watch, totaling about $19 million in stock.. Sander Gerber’s fund, Hudson Bay Capital Management, also sold off its call options., about $0 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 2 funds last quarter.

How are insiders trading Apartment Investment and Management Co. (NYSE:AIV)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company in focus has seen transactions within the past six months. Over the last half-year time frame, Apartment Investment and Management Co. (NYSE:AIV) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Apartment Investment and Management Co. (NYSE:AIV). These stocks are Essex Property Trust Inc (NYSE:ESS), BRE Properties Inc (NYSE:BRE), Senior Housing Properties Trust (NYSE:SNH), American Campus Communities, Inc. (NYSE:ACC), and Two Harbors Investment Corp (NYSE:TWO). This group of stocks are in the reit – residential industry and their market caps match AIV’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Essex Property Trust Inc (NYSE:ESS) 11 0 1
BRE Properties Inc (NYSE:BRE) 12 1 0
Senior Housing Properties Trust (NYSE:SNH) 8 0 0
American Campus Communities, Inc. (NYSE:ACC) 12 1 1
Two Harbors Investment Corp (NYSE:TWO) 18 6 0

With the returns shown by Insider Monkey’s studies, retail investors must always monitor hedge fund and insider trading sentiment, and Apartment Investment and Management Co. (NYSE:AIV) is an important part of this process.

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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.

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