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Is Public Storage (PSA) Going to Burn These Hedge Funds?

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Public Storage (NYSE:PSA) was in 18 hedge funds’ portfolio at the end of the first quarter of 2013. PSA investors should be aware of a decrease in hedge fund interest in recent months. There were 23 hedge funds in our database with PSA holdings at the end of the previous quarter.

To most market participants, hedge funds are viewed as underperforming, outdated investment tools of years past. While there are greater than 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the crème de la crème of this group, close to 450 funds. It is estimated that this group has its hands on the majority of the hedge fund industry’s total capital, and by keeping an eye on their top stock picks, we have formulated a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Public Storage (NYSE:PSA)Equally as beneficial, positive insider trading sentiment is another way to break down the stock market universe. Just as you’d expect, there are a number of incentives for an upper level exec to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the market-beating potential of this strategy if shareholders understand where to look (learn more here).

Keeping this in mind, let’s take a gander at the key action encompassing Public Storage (NYSE:PSA).

What have hedge funds been doing with Public Storage (NYSE:PSA)?

At Q1’s end, a total of 18 of the hedge funds we track were bullish in this stock, a change of -22% from one quarter earlier. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully.

When looking at the hedgies we track, AEW Capital Management, managed by Jeffrey Furber, holds the biggest position in Public Storage (NYSE:PSA). AEW Capital Management has a $230.4 million position in the stock, comprising 5.7% of its 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $40.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Phill Gross and Robert Atchinson’s Adage Capital Management, Cliff Asness’s AQR Capital Management and Ken Heebner’s Capital Growth Management.

Judging by the fact that Public Storage (NYSE:PSA) has experienced declining sentiment from the smart money, we can see that there lies a certain “tier” of hedgies who sold off their full holdings at the end of the first quarter. Intriguingly, Richard Driehaus’s Driehaus Capital sold off the largest stake of the “upper crust” of funds we track, worth close to $4.7 million in stock., and Matthew Hulsizer of PEAK6 Capital Management was right behind this move, as the fund cut about $1.5 million worth. These moves are important to note, as total hedge fund interest dropped by 5 funds at the end of the first quarter.

What have insiders been doing with Public Storage (NYSE:PSA)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has experienced transactions within the past 180 days. Over the last 180-day time frame, Public Storage (NYSE:PSA) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Public Storage (NYSE:PSA). These stocks are National Retail Properties, Inc. (NYSE:NNN), W.P. Carey Inc. REIT (NYSE:WPC), Annaly Capital Management, Inc. (NYSE:NLY), Vornado Realty Trust (NYSE:VNO), and American Tower Corp (NYSE:AMT). This group of stocks belong to the reit – diversified industry and their market caps are closest to PSA’s market cap.

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