Is RAIT Financial Trust (NYSE:RAS) a good investment?
If you were to ask many of your fellow readers, hedge funds are viewed as delayed, old financial tools of an era lost to time. Although there are more than 8,000 hedge funds in operation in present day, Insider Monkey aim at the leaders of this group, close to 525 funds. It is widely held that this group oversees the majority of the hedge fund industry’s total capital, and by keeping an eye on their highest quality stock picks, we’ve found a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as key, bullish insider trading sentiment is a second way to look at the marketplace. There are plenty of stimuli for an upper level exec to sell shares of his or her company, but just one, very obvious reason why they would buy. Several academic studies have demonstrated the market-beating potential of this tactic if you understand where to look (learn more here).
Keeping this in mind, let’s discuss the recent info about RAIT Financial Trust (NYSE:RAS).
What does the smart money think about RAIT Financial Trust (NYSE:RAS)?
At the end of the second quarter, a total of 12 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings substantially.
Out of the hedge funds we follow, Jim Simons’s Renaissance Technologies had the largest position in RAIT Financial Trust (NYSE:RAS), worth close to $5.9 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Royce & Associates, managed by Chuck Royce, which held a $4.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, Glenn Russell Dubin’s Highbridge Capital Management and Matthew Hulsizer’s PEAK6 Capital Management.
Judging by the fact that RAIT Financial Trust (NYSE:RAS) has experienced declining interest from upper-tier hedge fund managers, logic holds that there is a sect of hedge funds who sold off their entire stakes last quarter. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management dumped the biggest position of the 450+ funds we key on, valued at close to $3.4 million in stock, and J. Alan Reid Jr. of Forward Management was right behind this move, as the fund cut about $1.8 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading RAIT Financial Trust (NYSE:RAS)?
Insider buying made by high-level executives is best served when the primary stock in question has seen transactions within the past 180 days. Over the last 180-day time frame, RAIT Financial Trust (NYSE:RAS) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to RAIT Financial Trust (NYSE:RAS). These stocks are One Liberty Properties, Inc. (NYSE:OLP), AG Mortgage Investment Trust Inc (NYSE:MITT), Excel Trust Inc (NYSE:EXL), Apollo Commercial Real Est. Finance Inc (NYSE:ARI), and Winthrop Realty Trust (NYSE:FUR). This group of stocks are in the reit – diversified industry and their market caps resemble RAS’s market cap.