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Hedge Funds Are Buying Washington Real Estate Investment Trust (WRE)

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Washington Real Estate Investment Trust (NYSE:WRE) shareholders have witnessed an increase in enthusiasm from smart money recently.

In the eyes of most stock holders, hedge funds are seen as worthless, outdated financial vehicles of yesteryear. While there are over 8000 funds in operation at present, we look at the bigwigs 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 tracking their top equity investments, we have figured out a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outperformed 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Just as integral, optimistic insider trading sentiment is another way to break down the stock market universe. Just as you’d expect, there are plenty of motivations for an executive to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this method if “monkeys” know what to do (learn more here).

With these “truths” under our belt, let’s take a gander at the recent action surrounding Washington Real Estate Investment Trust (NYSE:WRE).

How are hedge funds trading Washington Real Estate Investment Trust (NYSE:WRE)?

Heading into Q2, a total of 9 of the hedge funds we track were long in this stock, a change of 50% from the first quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were boosting their holdings substantially.

Washington Real Estate Investment Trust: Upside Potential After Dividend CutOf the funds we track, Millennium Management, managed by Israel Englander, holds the largest position in Washington Real Estate Investment Trust (NYSE:WRE). Millennium Management has a $7.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $5.3 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that are bullish include D. E. Shaw’s D E Shaw, Cliff Asness’s AQR Capital Management and Matthew Tewksbury’s Stevens Capital Management.

Now, some big names were breaking ground themselves. D E Shaw, managed by D. E. Shaw, assembled the biggest position in Washington Real Estate Investment Trust (NYSE:WRE). D E Shaw had 4.9 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also initiated a $1.1 million position during the quarter. The other funds with brand new WRE positions are Ken Gray and Steve Walsh’s Bryn Mawr Capital and Mike Vranos’s Ellington.

What do corporate executives and insiders think about Washington Real Estate Investment Trust (NYSE:WRE)?

Insider purchases made by high-level executives is best served when the company in question has experienced transactions within the past half-year. Over the last six-month time frame, Washington Real Estate Investment Trust (NYSE:WRE) has seen zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Washington Real Estate Investment Trust (NYSE:WRE). These stocks are Equity One, Inc. (NYSE:EQY), EPR Properties (NYSE:EPR), Glimcher Realty Trust (NYSE:GRT), Alexander’s, Inc. (NYSE:ALX), and Northstar Realty Finance Corp. (NYSE:NRF). All of these stocks are in the reit – retail industry and their market caps are closest to WRE’s market cap.

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