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Is Extra Space Storage, Inc. (EXR) Going to Burn These Hedge Funds?: Sovran Self Storage Inc (SSS), DCT Industrial Trust Inc. (DCT)

Extra Space Storage, Inc. (NYSE:EXR) investors should pay attention to a decrease in enthusiasm from smart money of late.

3 of the Best REITs You Can Own Right NowIn the 21st century investor’s toolkit, there are a multitude of indicators shareholders can use to track their holdings. Two of the most useful are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best hedge fund managers can outperform the S&P 500 by a significant margin (see just how much).

Equally as integral, bullish insider trading activity is a second way to break down the investments you’re interested in. Just as you’d expect, there are many stimuli for an insider to get rid of shares of his or her company, but just one, very simple reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the impressive potential of this strategy if you know where to look (learn more here).

Consequently, it’s important to take a gander at the key action encompassing Extra Space Storage, Inc. (NYSE:EXR).

What does the smart money think about Extra Space Storage, Inc. (NYSE:EXR)?

At year’s end, a total of 13 of the hedge funds we track held long positions in this stock, a change of -19% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes significantly.

Of the funds we track, Ken Heebner’s Capital Growth Management had the most valuable position in Extra Space Storage, Inc. (NYSE:EXR), worth close to $79 million, accounting for 2.1% of its total 13F portfolio. The second largest stake is held by AEW Capital Management, managed by Jeffrey Furber, which held a $65 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Some other peers that are bullish include Israel Englander’s Millennium Management, D. E. Shaw’s D E Shaw and Ken Fisher’s Fisher Asset Management.

Due to the fact that Extra Space Storage, Inc. (NYSE:EXR) has witnessed falling interest from the smart money, we can see that there lies a certain “tier” of money managers that elected to cut their positions entirely in Q4. At the top of the heap, Louis Navellier’s Navellier & Associates sold off the biggest stake of the 450+ funds we key on, valued at close to $1 million in stock.. Douglas W. Case’s fund, Advanced Investment Partners, also dropped its stock, about $0 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 3 funds in Q4.

What have insiders been doing with Extra Space Storage, Inc. (NYSE:EXR)?

Insider purchases made by high-level executives is at its handiest when the company in focus has experienced transactions within the past six months. Over the latest half-year time period, Extra Space Storage, Inc. (NYSE:EXR) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Extra Space Storage, Inc. (NYSE:EXR). These stocks are Sovran Self Storage Inc (NYSE:SSS), DCT Industrial Trust Inc. (NYSE:DCT), CubeSmart (NYSE:CUBE), Duke Realty Corp (NYSE:DRE), and Biomed Realty Trust Inc (NYSE:BMR). All of these stocks are in the reit – industrial industry and their market caps are similar to EXR’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Sovran Self Storage Inc (NYSE:SSS) 10 0 4
DCT Industrial Trust Inc. (NYSE:DCT) 7 0 2
CubeSmart (NYSE:CUBE) 4 0 1
Duke Realty Corp (NYSE:DRE) 8 0 3
Biomed Realty Trust Inc (NYSE:BMR) 9 0 1

With the returns demonstrated by Insider Monkey’s tactics, retail investors should always watch hedge fund and insider trading activity, and Extra Space Storage, Inc. (NYSE:EXR) shareholders fit into this picture quite nicely.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.

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