Is Forestar Group Inc. (NYSE:FOR) an attractive investment right now? The best stock pickers are taking a pessimistic view. The number of long hedge fund positions stayed the same which is a slightly negative development in our experience.
At the moment, there are many indicators shareholders can use to track the equity markets. Some of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite investment managers can trounce the broader indices by a significant margin (see just how much).
Equally as beneficial, bullish insider trading sentiment is a second way to parse down the financial markets. Just as you’d expect, there are plenty of stimuli for a bullish insider to drop shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the impressive potential of this strategy if investors understand where to look (learn more here).
Now, we’re going to take a peek at the latest action surrounding Forestar Group Inc. (NYSE:FOR).
Hedge fund activity in Forestar Group Inc. (NYSE:FOR)
At the end of the fourth quarter, a total of 8 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings considerably.
When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the biggest position in Forestar Group Inc. (NYSE:FOR), worth close to $7.2 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Buckingham Capital Management, managed by David Keidan, which held a $6.6 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, Geoffrey Raynor’s Q Investments (Specter Holdings) and Ken Griffin’s Citadel Investment Group.
Because Forestar Group Inc. (NYSE:FOR) has witnessed declining sentiment from the aggregate hedge fund industry, we can see that there exists a select few money managers who sold off their entire stakes at the end of the year. At the top of the heap, Israel Englander’s Millennium Management said goodbye to the biggest position of all the hedgies we key on, worth close to $0.8 million in stock., and Mike Vranos of Ellington was right behind this move, as the fund said goodbye to about $0.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading Forestar Group Inc. (NYSE:FOR)?
Insider buying is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the last six-month time frame, Forestar Group Inc. (NYSE:FOR) has seen zero unique insiders purchasing, 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 Forestar Group Inc. (NYSE:FOR). These stocks are Irsa Inversiones y Rprsntcins SA (ADR) (NYSE:IRS), Western Digital Corp. (NASDAQ:WD), Texas Pacific Land Trust (NYSE:TPL), and Summit Hotel Properties Inc (NYSE:INN). All of these stocks are in the real estate development industry and their market caps resemble FOR’s market cap.