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Hedge Funds Are Crazy About Associated Estates Realty Corporation (AEC)

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Associated Estates Realty Corporation (NYSE:AEC) was in 6 hedge funds’ portfolio at the end of the fourth quarter of 2012. AEC shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. There were 5 hedge funds in our database with AEC positions at the end of the previous quarter.

In today’s marketplace, there are tons of indicators market participants can use to watch stocks. Two of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best fund managers can outperform the market by a superb margin (see just how much).

Associated Estates Realty Corporation (NYSE:AEC)

Just as integral, positive insider trading sentiment is another way to parse down the stock market universe. There are plenty of reasons for an insider to cut shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this strategy if “monkeys” understand where to look (learn more here).

With all of this in mind, it’s important to take a gander at the latest action surrounding Associated Estates Realty Corporation (NYSE:AEC).

Hedge fund activity in Associated Estates Realty Corporation (NYSE:AEC)

At year’s end, a total of 6 of the hedge funds we track held long positions in this stock, a change of 20% from the third quarter. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their holdings significantly.

Of the funds we track, J. Alan Reid, Jr.’s Forward Management had the largest position in Associated Estates Realty Corporation (NYSE:AEC), worth close to $19.8 million, accounting for 1.4% of its total 13F portfolio. On Forward Management’s heels is AQR Capital Management, managed by Cliff Asness, which held a $9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Eric D. Hovde’s Hovde Capital, Richard Driehaus’s Driehaus Capital and John Overdeck and David Siegel’s Two Sigma Advisors.

Consequently, specific money managers have been driving this bullishness. Driehaus Capital, managed by Richard Driehaus, assembled the most valuable position in Associated Estates Realty Corporation (NYSE:AEC). Driehaus Capital had 3.8 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $1.5 million investment in the stock during the quarter.

What do corporate executives and insiders think about Associated Estates Realty Corporation (NYSE:AEC)?

Insider purchases made by high-level executives is most useful when the company in focus has experienced transactions within the past half-year. Over the last 180-day time period, Associated Estates Realty Corporation (NYSE:AEC) has seen zero unique insiders buying, and 5 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Associated Estates Realty Corporation (NYSE:AEC). These stocks are Dynex Capital Inc (NYSE:DX), Apollo Residential Mortgage Inc (NYSE:AMTG), Resource Capital Corp. (NYSE:RSO), Education Realty Trust, Inc. (NYSE:EDR), and Silver Bay Realty Trust Corp (NYSE:SBY). This group of stocks are the members of the reit – residential industry and their market caps match AEC’s market cap.

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