DCT Industrial Trust Inc. (NYSE:DCT) has seen an increase in activity from the world’s largest hedge funds in recent months.
To most stock holders, hedge funds are seen as worthless, outdated investment tools of yesteryear. While there are more than 8000 funds with their doors open today, we at Insider Monkey choose to focus on the leaders of this group, around 450 funds. It is estimated that this group oversees the majority of all hedge funds’ total asset base, and by paying attention to their top equity investments, we have uncovered a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year 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 outpaced the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Equally as beneficial, optimistic insider trading sentiment is a second way to parse down the financial markets. As the old adage goes: there are plenty of motivations for an insider to downsize shares of his or her company, but just one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the impressive potential of this strategy if you know where to look (learn more here).
Now, it’s important to take a glance at the key action encompassing DCT Industrial Trust Inc. (NYSE:DCT).
How are hedge funds trading DCT Industrial Trust Inc. (NYSE:DCT)?
Heading into 2013, a total of 7 of the hedge funds we track were bullish in this stock, a change of 40% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in DCT Industrial Trust Inc. (NYSE:DCT). Royce & Associates has a $7.9 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, managed by Israel Englander, which held a $6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Jim Simons’s Renaissance Technologies, Anil Stevens and Glenn Shapiro’s Parameter Capital Management and Cliff Asness’s AQR Capital Management.
Consequently, key hedge funds were leading the bulls’ herd. Millennium Management, managed by Israel Englander, created the most outsized position in DCT Industrial Trust Inc. (NYSE:DCT). Millennium Management had 6 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $2.6 million position during the quarter. The only other fund with a brand new DCT position is Ken Griffin’s Citadel Investment Group.
Insider trading activity in DCT Industrial Trust Inc. (NYSE:DCT)
Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has experienced transactions within the past half-year. Over the latest six-month time frame, DCT Industrial Trust Inc. (NYSE:DCT) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to DCT Industrial Trust Inc. (NYSE:DCT). These stocks are Eastgroup Properties Inc (NYSE:EGP), First Industrial Realty Trust, Inc. (NYSE:FR), Potlatch Corporation (NASDAQ:PCH), Sovran Self Storage Inc (NYSE:SSS), and CubeSmart (NYSE:CUBE). This group of stocks are in the reit – industrial industry and their market caps match DCT’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Eastgroup Properties Inc (NYSE:EGP)||2||0||4|
|First Industrial Realty Trust, Inc. (NYSE:FR)||13||1||3|
|Potlatch Corporation (NASDAQ:PCH)||11||1||9|
|Sovran Self Storage Inc (NYSE:SSS)||10||0||4|
With the returns demonstrated by our studies, everyday investors must always watch hedge fund and insider trading sentiment, and DCT Industrial Trust Inc. (NYSE:DCT) applies perfectly to this mantra.