At the moment, there are dozens of indicators investors can use to track publicly traded companies. Two of the most underrated 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 their index-focused peers by a solid amount (see just how much).
Equally as key, bullish insider trading sentiment is another way to analyze the financial markets. There are a variety of reasons for an executive to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this tactic if you know where to look (learn more here).
Now that that's out of the way, let's study the recent info surrounding FelCor Lodging Trust Incorporated (NYSE:FCH).
At Q2's end, a total of 16 of the hedge funds we track held long positions in this stock, a change of 7% from the previous quarter. With hedge funds' sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were upping their holdings considerably.
According to our 13F database, Forward Management, managed by J. Alan Reid, Jr., holds the biggest position in FelCor Lodging Trust Incorporated (NYSE:FCH). Forward Management has a $30.6 million position in the stock, comprising 2.6% of its 13F portfolio. Sitting at the No. 2 spot is Paulson & Co, managed by John Paulson, which held a $29.6 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Don Morgan's Brigade Capital, D. E. Shaw's D E Shaw and Greg Poole's Echo Street Capital Management.
As aggregate interest spiked, specific money managers have been driving this bullishness. Forward Management, managed by J. Alan Reid, Jr., initiated the biggest position in FelCor Lodging Trust Incorporated (NYSE:FCH). Forward Management had 30.6 million invested in the company at the end of the quarter. John Paulson's Paulson & Co also initiated a $29.6 million position during the quarter. The following funds were also among the new FCH investors: Don Morgan's Brigade Capital, D. E. Shaw's D E Shaw, and Greg Poole's Echo Street Capital Management.
Insider buying made by high-level executives is at its handiest when the primary stock in question has experienced transactions within the past half-year. Over the last six-month time period, FelCor Lodging Trust Incorporated (NYSE:FCH) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also examine the relationship between both of these indicators 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 belong to the reit - hotel/motel industry and their market caps are similar to FCH's market cap.