Billionaire Steve Cohen Bought This Real Estate Investment Trust

Chuck Royce’s Royce & Associates owned 1.7 million shares of Colony Financial Inc at the end of September (find Royce’s favorite stocks). SAB Capital Management, a fund managed by Brian Jackelow which has investments in many other REITs,  initiated a position of about 530,000 shares (check out more stocks SAB was buying). Multiple Colony insiders sold shares at the end of December (see a history of insider sales at the company); while we don’t consider insider sales to be as significant as insider purchases, since the principles of diversification can make insider selling rational, it is still a factor to be aware of.

Of course, investors could consider other REITs instead of Colony if they are interested in the high yields offered by this type of business. Examples of diversified REITs include Vornado Realty Trust (NYSE:VNO), W.P. Carey Inc. (NYSE:WPC), and National Retail Properties, Inc. (NYSE:NNN), which all carry yields in the 3% to 5% range and have been publicly traded for at least one year. Some REITs with particularly high yields- and, as a result, quite a bit of attention from the market- are Annaly Capital Management, Inc. (NYSE:NLY) at 12% and American Capital Agency Corp. (NASDAQ:AGNC) at 16%. However, we would note that these companies have decreased their dividend payments in recent quarters and so investors should be wary of putting too much emphasis on the current yield.

Disclosure: I own no shares of any stocks mentioned in this article.