Potlatch Corporation (PCH): Insiders Aren’t Crazy About It

Is Potlatch Corporation (NASDAQ:PCH) a healthy stock for your portfolio? Prominent investors are selling. The number of bullish hedge fund bets were cut by 4 lately.

Potlatch Corporation (NASDAQ:PCH)

According to most stock holders, hedge funds are viewed as underperforming, outdated investment vehicles of yesteryear. While there are greater than 8000 funds in operation today, we hone in on the leaders of this group, about 450 funds. Most estimates calculate that this group oversees the lion’s share of all hedge funds’ total asset base, and by monitoring their top investments, we have brought to light a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Equally as integral, bullish insider trading sentiment is a second way to break down the investments you’re interested in. Just as you’d expect, there are plenty of stimuli for an upper level exec to downsize shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the impressive potential of this method if you know where to look (learn more here).

Consequently, it’s important to take a glance at the key action regarding Potlatch Corporation (NASDAQ:PCH).

What have hedge funds been doing with Potlatch Corporation (NASDAQ:PCH)?

At Q1′s end, a total of 8 of the hedge funds we track held long positions in this stock, a change of -33% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially.

Of the funds we track, AQR Capital Management, managed by Cliff Asness, holds the most valuable position in Potlatch Corporation (NASDAQ:PCH). AQR Capital Management has a $14.2 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which held a $12.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Ken Fisher’s Fisher Asset Management, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.

Judging by the fact that Potlatch Corporation (NASDAQ:PCH) has experienced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there exists a select few hedge funds that decided to sell off their full holdings at the end of the first quarter. Intriguingly, Mason Hawkins’s Southeastern Asset Management sold off the biggest stake of the “upper crust” of funds we track, valued at about $53.4 million in stock., and Ken Grossman and Glen Schneider of SG Capital Management was right behind this move, as the fund dropped about $4.4 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 4 funds at the end of the first quarter.

Insider trading activity in Potlatch Corporation (NASDAQ:PCH)

Bullish insider trading is most useful when the company we’re looking at has experienced transactions within the past half-year. Over the latest 180-day time frame, Potlatch Corporation (NASDAQ:PCH) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Potlatch Corporation (NASDAQ:PCH). These stocks are CubeSmart (NYSE:CUBE), DCT Industrial Trust Inc. (NYSE:DCT), Eastgroup Properties Inc (NYSE:EGP), Sovran Self Storage Inc (NYSE:SSS), and First Industrial Realty Trust, Inc. (NYSE:FR). This group of stocks are the members of the reit – industrial industry and their market caps are closest to PCH’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
CubeSmart (NYSE:CUBE) 10 0 2
DCT Industrial Trust Inc. (NYSE:DCT) 8 0 5
Eastgroup Properties Inc (NYSE:EGP) 7 0 4
Sovran Self Storage Inc (NYSE:SSS) 12 0 6
First Industrial Realty Trust, Inc. (NYSE:FR) 13 1 3

With the results shown by the aforementioned strategies, retail investors should always watch hedge fund and insider trading sentiment, and Potlatch Corporation (NASDAQ:PCH) is no exception.

Click here to learn why you should track hedge funds

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