Do Hedge Funds Love Physicians Realty Trust (DOC)?

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the third quarter we observed increased volatility and small-cap stocks underperformed the market. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards Physicians Realty Trust (NYSE:DOC) to find out whether it was one of their high conviction long-term ideas.

Physicians Realty Trust (NYSE:DOC) has seen a decrease in support from the world’s most elite money managers recently. At the end of this article we will also compare DOC to other stocks, including Advanced Energy Industries, Inc. (NASDAQ:AEIS), ServisFirst Bancshares, Inc. (NASDAQ:SFBS), and Hersha Hospitality Trust (NYSE:HT) to get a better sense of its popularity.

If you’d ask most investors, hedge funds are viewed as underperforming, old financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open at present, Our experts look at the masters of this club, about 700 funds. It is estimated that this group of investors shepherd bulk of the hedge fund industry’s total asset base, and by monitoring their finest equity investments, Insider Monkey has come up with many investment strategies that have historically beaten Mr. Market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

With all of this in mind, we’re going to review the recent action regarding Physicians Realty Trust (NYSE:DOC).

Hedge fund activity in Physicians Realty Trust (NYSE:DOC)

At Q3’s end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a decrease of 6% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, BHR Capital, managed by Michael Thompson, holds the largest position in Physicians Realty Trust (NYSE:DOC). In its latest 13F filing, the fund has reported ownership of $14.7 million worth of stock, comprising 2.1% of its 13F portfolio. Coming in second is Israel Englander of Millennium Management, with a $13.4 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that are bullish include Philip Hempleman’s Ardsley Partners, Cliff Asness’s AQR Capital Management and Amy Minella’s Cardinal Capital.

Judging by the fact that Physicians Realty Trust (NYSE:DOC) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of money managers that decided to sell off their full holdings in the third quarter. It’s worth mentioning that Jim Simons’s Renaissance Technologies cut the largest position of the 700 funds tracked by Insider Monkey, totaling an estimated $4.2 million in stock. Chao Ku’s fund, Nine Chapters Capital Management, also sold off its stock, about $1.3 million worth of DOC shares. These transactions are interesting, as aggregate hedge fund interest was cut by 1 fund in the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Physicians Realty Trust (NYSE:DOC) but similarly valued. We will take a look at Advanced Energy Industries, Inc. (NASDAQ:AEIS), ServisFirst Bancshares, Inc. (NASDAQ:SFBS), Hersha Hospitality Trust (NYSE:HT), and Union First Market Bankshares Corp. (NASDAQ:UBSH). This group of stocks’ market caps are closest to DOC’s market cap.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $53 million in DOC’s case. Advanced Energy Industries, Inc. (NASDAQ:AEIS) is the most popular stock in this table, while Union First Market Bankshares Corp. (NASDAQ:UBSH) is the laggard with only 8 bullish hedge fund positions. Compared to these stocks Physicians Realty Trust (NYSE:DOC) is more popular among hedgies. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.