Is Granite Real Estate Investment Trust (GRP) A Good Stock To Buy?

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As one would reasonably expect, specific money managers were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most valuable position in Granite Real Estate Investment Trust (NYSE:GRP). The fund had $2 million invested in the company at the end of the quarter. J. Alan Reid, Jr.’s Forward Management also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is John Overdeck and David Siegel’s Two Sigma Advisors.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Granite Real Estate Investment Trust (NYSE:GRP) but similarly valued. These stocks are FTI Consulting, Inc. (NYSE:FCN), Centrais Eletricas Brasileiras SA (ADR) (NYSE:EBR), Herman Miller, Inc. (NASDAQ:MLHR), and Zendesk Inc (NYSE:ZEN). All of these stocks’ market caps are closest to GRP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FCN 9 24318 -2
EBR 6 10869 2
MLHR 26 126616 3
ZEN 21 282574 -2

As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $111 million. That figure was $90 million in GRP’s case, not a positive sign. Herman Miller, Inc. (NASDAQ:MLHR) is the most popular stock in this table, while Centrais Eletricas Brasileiras SA (ADR) (NYSE:EBR) is at the other end of the specter with only 6 bullish hedge fund positions. Granite Real Estate Investment Trust (NYSE:GRP) 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 MLHR might be a better candidate to consider a long position.

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