Hedge Funds Aren’t Crazy About Preferred Apartment Communities Inc. (APTS) Anymore

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Due to the fact that Preferred Apartment Communities Inc. (NYSE:APTS) has faced a declining sentiment from hedge fund managers, logic holds that there exists a select few fund managers who were dropping their positions entirely in the third quarter. At the top of the heap, Renaissance Technologies cut the largest investment of all the hedgies followed by Insider Monkey, valued at about $1 million in stock. D E Shaw also sold off its stock, about $0.3 million worth of shares. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Preferred Apartment Communities Inc. (NYSE:APTS) but similarly valued. These stocks are Baozun Inc (ADR) (NASDAQ:BZUN), Zix Corporation (NASDAQ:ZIXI), Anthera Pharmaceuticals Inc (NASDAQ:ANTH), and World Acceptance Corp. (NASDAQ:WRLD). All of these stocks’ market caps are closest to Preferred Apartment Communities Inc. (NYSE:APTS)’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BZUN 5 6055 -2
ZIXI 16 24485 -1
ANTH 14 33309 3
WRLD 17 47604 -1

As you can see, these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. That figure was $5 million in Preferred Apartment Communities Inc. (NYSE:APTS)’s case. World Acceptance Corp. (NASDAQ:WRLD) is the most popular stock in this table. On the other hand, Baozun Inc (ADR) (NASDAQ:BZUN) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks, Preferred Apartment Communities Inc. (NYSE:APTS) is even less popular than Baozun Inc (ADR) (NASDAQ:BZUN). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.

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