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This Metric Says You Are Smart to Sell Apartment Investment and Management Co. (AIV)

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Apartment Investment and Management Co. (NYSE:AIV) was in 11 hedge funds’ portfolio at the end of March. AIV investors should be aware of a decrease in hedge fund sentiment recently. There were 14 hedge funds in our database with AIV positions at the end of the previous quarter.

Apartment Investment and Management Co. (NYSE:AIV)

If you’d ask most stock holders, hedge funds are seen as unimportant, old financial tools of yesteryear. While there are over 8000 funds in operation at present, we at Insider Monkey hone in on the top tier of this group, close to 450 funds. It is widely believed that this group controls the lion’s share of the smart money’s total capital, and by monitoring their top investments, we have determined a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 outperformed 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 break down the marketplace. As the old adage goes: there are a number of reasons for an executive to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the market-beating potential of this strategy if you know where to look (learn more here).

With all of this in mind, it’s important to take a peek at the latest action regarding Apartment Investment and Management Co. (NYSE:AIV).

How have hedgies been trading Apartment Investment and Management Co. (NYSE:AIV)?

Heading into Q2, a total of 11 of the hedge funds we track were bullish in this stock, a change of -21% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings substantially.

When looking at the hedgies we track, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Apartment Investment and Management Co. (NYSE:AIV). Citadel Investment Group has a $69 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Two Sigma Advisors, managed by John Overdeck and David Siegel, which held a $37.5 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Clint Carlson’s Carlson Capital, Jim Simons’s Renaissance Technologies and Matthew Tewksbury’s Stevens Capital Management.

Since Apartment Investment and Management Co. (NYSE:AIV) has witnessed falling interest from the smart money, it’s easy to see that there were a few hedgies who sold off their positions entirely last quarter. At the top of the heap, John Khoury’s Long Pond Capital dumped the largest position of all the hedgies we watch, valued at about $12.4 million in stock., and Anil Stevens and Glenn Shapiro of Parameter Capital Management was right behind this move, as the fund dumped about $2.8 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 3 funds last quarter.

How have insiders been trading Apartment Investment and Management Co. (NYSE:AIV)?

Bullish insider trading is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the last six-month time period, Apartment Investment and Management Co. (NYSE:AIV) has seen zero unique insiders buying, and 6 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Apartment Investment and Management Co. (NYSE:AIV). These stocks are Essex Property Trust Inc (NYSE:ESS), BRE Properties Inc (NYSE:BRE), Senior Housing Properties Trust (NYSE:SNH), American Campus Communities, Inc. (NYSE:ACC), and Two Harbors Investment Corp (NYSE:TWO). All of these stocks are in the reit – residential industry and their market caps match AIV’s market cap.

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