Now, according to many traders, hedge funds are assumed to be useless, old financial tools of a forgotten age. Although there are In excess of 8,000 hedge funds with their doors open currently, Insider Monkey looks at the masters of this club, close to 525 funds. Analysts calculate that this group has its hands on most of the hedge fund industry’s total capital, and by monitoring their best equity investments, we’ve determined a few investment strategies that have historically outpaced the S&P 500. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Just as key, positive insider trading sentiment is a second way to look at the stock market universe. As the old adage goes: there are a variety of incentives for a bullish insider to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this method if piggybackers know what to do (learn more here).
Keeping this in mind, let’s analyze the recent info surrounding Starwood Property Trust, Inc. (NYSE:STWD).
What have hedge funds been doing with Starwood Property Trust, Inc. (NYSE:STWD)?
At Q2’s end, a total of 26 of the hedge funds we track held long positions in this stock, a change of 13% from the previous quarter. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially.
As aggregate interest spiked, specific money managers were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, created the most valuable position in Starwood Property Trust, Inc. (NYSE:STWD). Citadel Investment Group had 139.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $106.4 million position during the quarter. The other funds with new positions in the stock are Doug Silverman and Alexander Klabin’s Senator Investment Group, Glenn J. Krevlin’s Glenhill Advisors, and Frank Brosens’s Taconic Capital.
Insider trading activity in Starwood Property Trust, Inc. (NYSE:STWD)
Insider buying made by high-level executives is best served when the company in focus has experienced transactions within the past six months. Over the last 180-day time period, Starwood Property Trust, Inc. (NYSE:STWD) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to Starwood Property Trust, Inc. (NYSE:STWD). These stocks are Chimera Investment Corporation (NYSE:CIM), MFA Financial, Inc. (NYSE:MFA), National Retail Properties, Inc. (NYSE:NNN), Retail Properties of America Inc (NYSE:RPAI), and Douglas Emmett, Inc. (NYSE:DEI). This group of stocks are the members of the reit – diversified industry and their market caps resemble STWD’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Chimera Investment Corporation (NYSE:CIM) | 23 | 0 | 0 |
| MFA Financial, Inc. (NYSE:MFA) | 18 | 0 | 0 |
| National Retail Properties, Inc. (NYSE:NNN) | 16 | 0 | 0 |
| Retail Properties of America Inc (NYSE:RPAI) | 8 | 0 | 0 |
| Douglas Emmett, Inc. (NYSE:DEI) | 7 | 0 | 0 |
Using the results demonstrated by our research, regular investors should always keep one eye on hedge fund and insider trading activity, and Starwood Property Trust, Inc. (NYSE:STWD) shareholders fit into this picture quite nicely.
