How Sabine Royalty Trust (SBR) Compares to Its Peers

We view hedge fund activity in the stock as unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Hawkins Capital).

Let’s now take a look at hedge fund activity in other stocks similar to Sabine Royalty Trust (NYSE:SBR). We will take a look at MDC Partners Inc. (USA) (NASDAQ:MDCA), Lumber Liquidators Holdings Inc (NYSE:LL), PennantPark Investment Corp. (NASDAQ:PNNT), and First Potomac Realty Trust (NYSE:FPO). This group of stocks’ market valuations are closest to SBR’s market valuation.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $13 million in SBR’s case. Lumber Liquidators Holdings Inc (NYSE:LL) is the most popular stock in this table. On the other hand PennantPark Investment Corp. (NASDAQ:PNNT) is the least popular one with only 5 bullish hedge fund positions. Sabine Royalty Trust (NYSE:SBR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LL might be a better candidate to consider taking a long position in.

Disclosure: None