Brandywine Realty Trust (BDN): Hedge Funds and Insiders Are Bearish, What Should You Do?

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Is Brandywine Realty Trust (NYSE:BDN) a bargain? The smart money is taking a pessimistic view. The number of bullish hedge fund bets were cut by 3 lately.

Brandywine Realty Trust (NYSE:BDN)

According to most shareholders, hedge funds are assumed to be worthless, old financial vehicles of yesteryear. While there are over 8000 funds in operation at the moment, we at Insider Monkey hone in on the masters of this club, about 450 funds. Most estimates calculate that this group controls the majority of the hedge fund industry’s total capital, and by watching their best investments, we have identified a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outstripped 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Just as integral, bullish insider trading sentiment is another way to parse down the marketplace. Obviously, there are many stimuli for a bullish insider to drop shares of his or her company, but just one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the impressive potential of this tactic if shareholders understand where to look (learn more here).

Keeping this in mind, it’s important to take a peek at the recent action surrounding Brandywine Realty Trust (NYSE:BDN).

How have hedgies been trading Brandywine Realty Trust (NYSE:BDN)?

At the end of the first quarter, a total of 9 of the hedge funds we track were long in this stock, a change of -25% from the first quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes significantly.

According to our comprehensive database, David Dreman’s Dreman Value Management had the most valuable position in Brandywine Realty Trust (NYSE:BDN), worth close to $39.3 million, accounting for 1% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $9.9 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedgies that hold long positions include Ken Griffin’s Citadel Investment Group, Cliff Asness’s AQR Capital Management and Anil Stevens and Glenn Shapiro’s Parameter Capital Management.

Due to the fact that Brandywine Realty Trust (NYSE:BDN) has witnessed declining sentiment from the smart money, it’s easy to see that there exists a select few fund managers who were dropping their full holdings in Q1. It’s worth mentioning that Israel Englander’s Millennium Management cut the biggest stake of all the hedgies we watch, comprising close to $4.3 million in stock.. D. E. Shaw’s fund, D E Shaw, also said goodbye to its stock, about $4.2 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds in Q1.

How are insiders trading Brandywine Realty Trust (NYSE:BDN)?

Insider trading activity, especially when it’s bullish, is best served when the company in question has seen transactions within the past half-year. Over the last 180-day time period, Brandywine Realty Trust (NYSE:BDN) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Brandywine Realty Trust (NYSE:BDN). These stocks are Newcastle Investment Corp. (NYSE:NCT), Spirit Realty Capital Inc (NYSE:SRC), Lexington Realty Trust (NYSE:LXP), Redwood Trust, Inc. (NYSE:RWT), and PS Business Parks Inc (NYSE:PSB). This group of stocks belong to the reit – diversified industry and their market caps are closest to BDN’s market cap.

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