Gramercy Capital Corp. (NYSE:GKK) was in 9 hedge funds’ portfolio at the end of the fourth quarter of 2012. GKK investors should pay attention to an increase in hedge fund sentiment of late. There were 7 hedge funds in our database with GKK positions at the end of the previous quarter.
According to most market participants, hedge funds are assumed to be underperforming, outdated financial vehicles of years past. While there are more than 8000 funds in operation at the moment, we hone in on the aristocrats of this club, about 450 funds. Most estimates calculate that this group controls the lion’s share of all hedge funds’ total capital, and by keeping an eye on their top investments, we have revealed a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 trumped the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as important, optimistic insider trading sentiment is a second way to break down the marketplace. As the old adage goes: there are a number of reasons for an executive to downsize shares of his or her company, but only one, very clear reason why they would buy. Various academic studies have demonstrated the valuable potential of this strategy if piggybackers understand what to do (learn more here).
Consequently, it’s important to take a glance at the latest action surrounding Gramercy Capital Corp. (NYSE:GKK).
What does the smart money think about Gramercy Capital Corp. (NYSE:GKK)?
In preparation for this year, a total of 9 of the hedge funds we track held long positions in this stock, a change of 29% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes substantially.
When looking at the hedgies we track, D. E. Shaw’s D E Shaw had the largest position in Gramercy Capital Corp. (NYSE:GKK), worth close to $1 million, accounting for 0% of its total 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $0 million position; 0% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include J. Alan Reid, Jr.’s Forward Management, Ken Griffin’s Citadel Investment Group and Cliff Asness’s AQR Capital Management.
Now, key hedge funds have been driving this bullishness. Millennium Management, managed by Israel Englander, created the most valuable position in Gramercy Capital Corp. (NYSE:GKK). Millennium Management had 0 million invested in the company at the end of the quarter. Whitney Tilson’s T2 Partners also initiated a $0 million position during the quarter. The only other fund with a brand new GKK position is William Michaelcheck’s Mariner Investment Group.
How are insiders trading Gramercy Capital Corp. (NYSE:GKK)?
Bullish insider trading is at its handiest when the primary stock in question has experienced transactions within the past half-year. Over the last half-year time frame, Gramercy Capital Corp. (NYSE:GKK) has seen 3 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Gramercy Capital Corp. (NYSE:GKK). These stocks are Winthrop Realty Trust (NYSE:FUR), Gladstone Commercial Corporation (NASDAQ:GOOD), Arbor Realty Trust, Inc. (NYSE:ABR), Whitestone REIT (NYSE:WSR), and One Liberty Properties, Inc. (NYSE:OLP). All of these stocks are in the reit – diversified industry and their market caps resemble GKK’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Winthrop Realty Trust (NYSE:FUR)||7||0||0|
|Gladstone Commercial Corporation (NASDAQ:GOOD)||1||1||2|
|Arbor Realty Trust, Inc. (NYSE:ABR)||5||3||2|
|Whitestone REIT (NYSE:WSR)||3||1||0|
|One Liberty Properties, Inc. (NYSE:OLP)||5||3||3|
With the returns exhibited by our strategies, retail investors must always watch hedge fund and insider trading sentiment, and Gramercy Capital Corp. (NYSE:GKK) shareholders fit into this picture quite nicely.