In the 21st century investor’s toolkit, there are a multitude of methods market participants can use to monitor publicly traded companies. A duo of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best money managers can trounce their index-focused peers by a healthy amount (see just how much).
Just as necessary, bullish insider trading activity is a second way to look at the investments you’re interested in. As the old adage goes: there are a variety of reasons for a corporate insider to drop shares of his or her company, but just one, very obvious reason why they would buy. Several academic studies have demonstrated the market-beating potential of this method if investors understand where to look (learn more here).
Furthermore, we’re going to discuss the recent info for DiamondRock Hospitality Company (NYSE:DRH).
What have hedge funds been doing with DiamondRock Hospitality Company (NYSE:DRH)?
In preparation for the third quarter, a total of 13 of the hedge funds we track held long positions in this stock, a change of -13% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially.
When using filings from the hedgies we track, Ken Heebner’s Capital Growth Management had the biggest position in DiamondRock Hospitality Company (NYSE:DRH), worth close to $67 million, accounting for 1.8% of its total 13F portfolio. Coming in second is John Khoury of Long Pond Capital, with a $33 million position; the fund has 5.8% of its 13F portfolio invested in the stock. Other peers that hold long positions include Ken Griffin’s Citadel Investment Group, Richard S. Pzena’s Pzena Investment Management and Israel Englander’s Millennium Management.
As DiamondRock Hospitality Company (NYSE:DRH) has experienced dropping sentiment from the smart money’s best and brightest, it’s easy to see that there is a sect of fund managers that slashed their entire stakes in Q1. It’s worth mentioning that Jim Simons’s Renaissance Technologies dumped the largest investment of the “upper crust” of funds we monitor, comprising an estimated $9.7 million in stock, and Steven Cohen of SAC Capital Advisors was right behind this move, as the fund cut about $1.9 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 2 funds in Q1.
How have insiders been trading DiamondRock Hospitality Company (NYSE:DRH)?
Insider buying made by high-level executives is particularly usable when the company in question has seen transactions within the past six months. Over the latest 180-day time frame, DiamondRock Hospitality Company (NYSE:DRH) has experienced 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 DiamondRock Hospitality Company (NYSE:DRH). These stocks are RLJ Lodging Trust (NYSE:RLJ), LaSalle Hotel Properties (NYSE:LHO), Pebblebrook Hotel Trust (NYSE:PEB), Sunstone Hotel Investors Inc (NYSE:SHO), and Strategic Hotels and Resorts Inc (NYSE:BEE). This group of stocks are the members of the reit – hotel/motel industry and their market caps resemble DRH’s market cap.