We can judge whether Sotherly Hotels Inc (NASDAQ:SOHO) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
Sotherly Hotels Inc (NASDAQ:SOHO) investors should be aware of an increase in activity from the world’s largest hedge funds of late. At the end of this article, we will also compare Sotherly Hotels Inc (NASDAQ:SOHO) to other stocks, including Thompson Creek Metals Company Inc (USA) (NYSE:TC), and Peak Resorts Inc (NYSE:SKIS) to get a better sense of its popularity.
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To most shareholders, hedge funds are viewed as unimportant, old investment tools of yesteryear. While there are greater than 8000 funds with their doors open at the moment, We hone in on the masters of this group, about 700 funds. These money managers have their hands on bulk of the smart money’s total capital, and by tailing their best equity investments, Insider Monkey has determined a number of investment strategies that have historically outperformed the market. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
With all of this in mind, we’re going to check out the key action encompassing Sotherly Hotels Inc (NASDAQ:SOHO).
How are hedge funds trading Sotherly Hotels Inc (NASDAQ:SOHO)?
Heading into Q4, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 25% from the second quarter. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Adam Wright and Gary Kohler’s Blue Clay Capital has the number one position in Sotherly Hotels Inc (NASDAQ:SOHO), worth close to $1 million, accounting for 0.8% of its total 13F portfolio. Coming in second is Alyeska Investment Group, led by Anand Parekh, holding a $0.9 million position; less than 0.1% of its 13F portfolio is allocated to the company. Some other peers with similar optimism consist of Renaissance Technologies, Mark Coe’s Coe Capital Management, and Israel Englander’s Millennium Management.
Now, key money managers were leading the bulls’ herd. Millennium Management assembled the most valuable position in Sotherly Hotels Inc (NASDAQ:SOHO). Millennium Management had $0.1 million invested in the company at the end of the quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Sotherly Hotels Inc (NASDAQ:SOHO) but similarly valued. We will take a look at Thompson Creek Metals Company Inc (USA) (NYSE:TC), Peak Resorts Inc (NYSE:SKIS), and General Finance Corporation (NASDAQ:GFN). This group of stocks’ market caps is closest to Sotherly Hotels Inc (NASDAQ:SOHO)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TC | 9 | 3332 | 0 |
| SKIS | 6 | 15897 | 1 |
| GFN | 4 | 866 | 0 |
As you can see, these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $3 million in Sotherly Hotels Inc (NASDAQ:SOHO)’s case. Thompson Creek Metals Company Inc (USA) (NYSE:TC) is the most popular stock in this table. On the other hand, General Finance Corporation (NASDAQ:GFN) is the least popular one with only 4 bullish hedge fund positions. Sotherly Hotels Inc (NASDAQ:SOHO) 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, Thompson Creek Metals Company Inc (USA) (NYSE:TC) might be a better candidate to consider a long position.