CBL & Associates Properties, Inc. (CBL): Are Hedge Funds Right About This Stock?

CBL & Associates Properties, Inc. (NYSE:CBL) has experienced an increase in activity from the world’s largest hedge funds of late.

If you’d ask most traders, hedge funds are assumed to be slow, outdated financial vehicles of the past. While there are greater than 8000 funds trading at the moment, we at Insider Monkey look at the masters of this group, around 450 funds. It is widely believed that this group controls the majority of all hedge funds’ total asset base, and by keeping an eye on their top picks, we have unearthed a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 (explore the details and some picks here).

Just as important, bullish insider trading activity is a second way to parse down the marketplace. As the old adage goes: there are many stimuli for an upper level exec to downsize shares of his or her company, but only one, very obvious reason why they would buy. Various academic studies have demonstrated the valuable potential of this strategy if investors understand where to look (learn more here).

Keeping this in mind, we’re going to take a gander at the key action regarding CBL & Associates Properties, Inc. (NYSE:CBL).

How are hedge funds trading CBL & Associates Properties, Inc. (NYSE:CBL)?

Heading into Q2, a total of 11 of the hedge funds we track were bullish in this stock, a change of 10% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings substantially.

When looking at the hedgies we track, Jim Simons’s Renaissance Technologies had the most valuable position in CBL & Associates Properties, Inc. (NYSE:CBL), worth close to $59.9 million, accounting for 0.1% of its total 13F portfolio. The second largest stake is held by Dreman Value Management, managed by David Dreman, which held a $35.4 million position; 0.9% of its 13F portfolio is allocated to the company. Some other hedgies that hold long positions include D. E. Shaw’s D E Shaw, Richard Driehaus’s Driehaus Capital and John Overdeck and David Siegel’s Two Sigma Advisors.

Consequently, specific money managers have jumped into CBL & Associates Properties, Inc. (NYSE:CBL) headfirst. Driehaus Capital, managed by Richard Driehaus, created the most outsized position in CBL & Associates Properties, Inc. (NYSE:CBL). Driehaus Capital had 2.2 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $1.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Ken Gray and Steve Walsh’s Bryn Mawr Capital and Thomas Bailard’s Bailard Inc.

Insider trading activity in CBL & Associates Properties, Inc. (NYSE:CBL)

Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has experienced transactions within the past 180 days. Over the latest six-month time period, CBL & Associates Properties, Inc. (NYSE:CBL) has experienced 1 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to CBL & Associates Properties, Inc. (NYSE:CBL). These stocks are Taubman Centers, Inc. (NYSE:TCO), Regency Centers Corp (NYSE:REG), Tanger Factory Outlet Centers Inc. (NYSE:SKT), Hospitality Properties Trust (NYSE:HPT), and Weingarten Realty Investors (NYSE:WRI). This group of stocks belong to the reit – retail industry and their market caps are similar to CBL’s market cap.