Should Vornado Realty Trust (NYSE:VNO) investors track the following data?
If you were to ask many investors, hedge funds are assumed to be bloated, old investment vehicles of an era lost to time. Although there are over 8,000 hedge funds in operation today, Insider Monkey looks at the bigwigs of this group, about 525 funds. It is assumed that this group has its hands on the majority of all hedge funds' total assets, and by monitoring their best stock picks, we've uncovered a number of investment strategies that have historically outperformed the S&P 500. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Just as crucial, bullish insider trading sentiment is another way to look at the marketplace. Obviously, there are a number of stimuli for an executive to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this strategy if investors understand where to look (learn more here).
Keeping this in mind, we're going to discuss the newest info surrounding Vornado Realty Trust (NYSE:VNO).
At the end of the second quarter, a total of 17 of the hedge funds we track held long positions in this stock, a change of -23% from the first quarter. With hedge funds' capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings considerably.
According to our 13F database, Jeffrey Furber's AEW Capital Management had the biggest position in Vornado Realty Trust (NYSE:VNO), worth close to $137.2 million, accounting for 3.6% of its total 13F portfolio. Coming in second is Martin Whitman of Third Avenue Management, with a $54.7 million position; 1.1% of its 13F portfolio is allocated to the stock. Other peers that are bullish include Dmitry Balyasny's Balyasny Asset Management, Jonathan Kolatch's Redwood Capital Management and Mason Hawkins's Southeastern Asset Management.
Since Vornado Realty Trust (NYSE:VNO) has witnessed declining interest from upper-tier hedge fund managers, it's safe to say that there were a few funds that decided to sell off their positions entirely heading into Q2. It's worth mentioning that Jim Simons's Renaissance Technologies sold off the largest stake of the "upper crust" of funds we track, valued at an estimated $39.3 million in stock, and Steven Cohen of SAC Capital Advisors was right behind this move, as the fund cut about $13.6 million worth. These transactions are important to note, as total hedge fund interest fell by 5 funds heading into Q2.
Bullish insider trading is at its handiest when the company we're looking at has experienced transactions within the past half-year. Over the latest six-month time frame, Vornado Realty Trust (NYSE:VNO) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll also examine the relationship between both of these indicators in other stocks similar to Vornado Realty Trust (NYSE:VNO). These stocks are National Retail Properties, Inc. (NYSE:NNN), W.P. Carey Inc. REIT (NYSE:WPC), American Tower Corp (NYSE:AMT), Public Storage (NYSE:PSA), and Annaly Capital Management, Inc. (NYSE:NLY). This group of stocks are the members of the reit - diversified industry and their market caps resemble VNO's market cap.