Is Pebblebrook Hotel Trust (PEB) a Good Buy?

Seeing as Pebblebrook Hotel Trust (NYSE:PEB) has experienced a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of hedgies that elected to cut their positions entirely by the end of the third quarter. At the top of the heap, Richard Driehaus’ Driehaus Capital cut the largest position of all the hedgies tracked by Insider Monkey, valued at about $3.5 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dumped about $1.5 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 2 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Pebblebrook Hotel Trust (NYSE:PEB) but similarly valued. We will take a look at Janus Capital Group Inc (NYSE:JNS),Regal-Beloit Corporation (NYSE:RBC), The Medicines Company (NASDAQ:MDCO), and NorthWestern Corp (NYSE:NWE). This group of stocks’ market valuations are closest to PEB’s market valuation.

As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $359 million. That figure was $13 million in PEB’s case. Janus Capital Group Inc (NYSE:JNS) is the most popular stock in this table. On the other hand NorthWestern Corp (NYSE:NWE) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Pebblebrook Hotel Trust (NYSE:PEB) is even less popular than NWE. 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.