In the financial world, there are many gauges market participants can use to track stocks. A pair of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top hedge fund managers can outperform the broader indices by a healthy margin (see just how much).
Equally as crucial, positive insider trading sentiment is a second way to analyze the investments you're interested in. As the old adage goes: there are a number of reasons for an insider to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this tactic if you know what to do (learn more here).
What's more, we're going to study the recent info surrounding Retail Opportunity Investments Corp (NASDAQ:ROIC).
At Q2's end, a total of 11 of the hedge funds we track held long positions in this stock, a change of -8% from the previous quarter. With hedgies' capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes substantially.
When using filings from the hedgies we track, Jeffrey Tannenbaum's Fir Tree had the most valuable position in Retail Opportunity Investments Corp (NASDAQ:ROIC), worth close to $43.8 million, comprising 0.6% of its total 13F portfolio. The second largest stake is held by AEW Capital Management, managed by Jeffrey Furber, which held a $29.1 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include J. Alan Reid, Jr.'s Forward Management, Jeffrey Tannenbaum's Fir Tree and Cliff Asness's AQR Capital Management.
As Retail Opportunity Investments Corp (NASDAQ:ROIC) has faced dropping sentiment from upper-tier hedge fund managers, logic holds that there was a specific group of fund managers that decided to sell off their full holdings in Q1. It's worth mentioning that Glenn J. Krevlin's Glenhill Advisors cut the biggest position of the 450+ funds we key on, worth an estimated $22.4 million in stock. Brian Taylor's fund, Pine River Capital Management, also dumped its stock, about $8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 1 funds in Q1.
Insider buying is most useful when the primary stock in question has experienced transactions within the past half-year. Over the latest half-year time frame, Retail Opportunity Investments Corp (NASDAQ:ROIC) has seen zero unique insiders buying, 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 Retail Opportunity Investments Corp (NASDAQ:ROIC). These stocks are Ramco-Gershenson Properties Trust (NYSE:RPT), Getty Realty Corp. (NYSE:GTY), Urstadt Biddle Properties Inc (NYSE:UBA), Inland Real Estate Corporation (NYSE:IRC), and Saul Centers Inc (NYSE:BFS). All of these stocks are in the reit - retail industry and their market caps are closest to ROIC's market cap.