Is SL Green Realty Corp (NYSE:SLG) an excellent investment now? Prominent investors are reducing their bets on the stock. The number of bullish hedge fund positions decreased by 5 in recent months.
In the eyes of most stock holders, hedge funds are viewed as unimportant, old investment vehicles of years past. While there are greater than 8000 funds with their doors open today, we at Insider Monkey look at the elite of this group, about 450 funds. Most estimates calculate that this group oversees the majority of all hedge funds’ total capital, and by tracking their top equity investments, we have brought to light a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as beneficial, bullish insider trading activity is a second way to parse down the investments you’re interested in. Obviously, there are many motivations for a bullish insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Several empirical studies have demonstrated the impressive potential of this tactic if piggybackers know where to look (learn more here).
Keeping this in mind, we’re going to take a look at the recent action surrounding SL Green Realty Corp (NYSE:SLG).
Hedge fund activity in SL Green Realty Corp (NYSE:SLG)
At Q1’s end, a total of 10 of the hedge funds we track held long positions in this stock, a change of -33% from the first quarter. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, D. E. Shaw’s D E Shaw had the most valuable position in SL Green Realty Corp (NYSE:SLG), worth close to $14 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Robert Jaffe of Force Capital, with a $11.9 million position; 1.1% of its 13F portfolio is allocated to the company. Remaining hedge funds that hold long positions include Dmitry Balyasny’s Balyasny Asset Management, Curtis Macnguyen’s Ivory Capital (Investment Mgmt) and Cliff Asness’s AQR Capital Management.
Because SL Green Realty Corp (NYSE:SLG) has experienced a declination in interest from hedge fund managers, we can see that there exists a select few fund managers that decided to sell off their entire stakes heading into Q2. Intriguingly, Israel Englander’s Millennium Management dropped the biggest stake of the “upper crust” of funds we watch, worth an estimated $11.7 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund dropped about $6.9 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 5 funds heading into Q2.
Insider trading activity in SL Green Realty Corp (NYSE:SLG)
Insider buying is most useful when the company in focus has seen transactions within the past half-year. Over the latest half-year time frame, SL Green Realty Corp (NYSE:SLG) has experienced zero unique insiders buying, and 8 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to SL Green Realty Corp (NYSE:SLG). These stocks are DDR Corp (NYSE:DDR), Kimco Realty Corp (NYSE:KIM), Macerich Co (NYSE:MAC), Federal Realty Investment Trust (NYSE:FRT), and Realty Income Corp (NYSE:O). This group of stocks belong to the reit – retail industry and their market caps are closest to SLG’s market cap.