Rouse Properties Inc (NYSE:RSE) was in 7 hedge funds’ portfolio at the end of December. RSE investors should be aware of an increase in hedge fund interest of late. There were 6 hedge funds in our database with RSE positions at the end of the previous quarter.
In the eyes of most stock holders, hedge funds are perceived as worthless, old investment vehicles of years past. While there are greater than 8000 funds trading at the moment, we hone in on the elite of this club, about 450 funds. Most estimates calculate that this group controls most of the hedge fund industry’s total capital, and by paying attention to their best equity investments, we have come up with a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as important, optimistic insider trading activity is a second way to parse down the stock market universe. Obviously, there are many motivations for an upper level exec to cut 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 strategy if “monkeys” know where to look (learn more here).
With these “truths” under our belt, let’s take a glance at the recent action surrounding Rouse Properties Inc (NYSE:RSE).
What does the smart money think about Rouse Properties Inc (NYSE:RSE)?
At the end of the fourth quarter, a total of 7 of the hedge funds we track held long positions in this stock, a change of 17% from the third quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially.
According to our comprehensive database, Horizon Asset Management, managed by Murray Stahl, holds the biggest position in Rouse Properties Inc (NYSE:RSE). Horizon Asset Management has a $79.5 million position in the stock, comprising 2.5% of its 13F portfolio. Coming in second is Louis Bacon of Moore Global Investments, with a $12.7 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Chuck Royce’s Royce & Associates, D. E. Shaw’s D E Shaw and Jim Simons’s Renaissance Technologies.
Now, key hedge funds were leading the bulls’ herd. Renaissance Technologies, managed by Jim Simons, initiated the most outsized position in Rouse Properties Inc (NYSE:RSE). Renaissance Technologies had 0.9 million invested in the company at the end of the quarter.
What do corporate executives and insiders think about Rouse Properties Inc (NYSE:RSE)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has experienced transactions within the past half-year. Over the last 180-day time period, Rouse Properties Inc (NYSE:RSE) has seen 3 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Rouse Properties Inc (NYSE:RSE). These stocks are Acadia Realty Trust (NYSE:AKR), E-House (China) Holdings Limited (ADR) (NYSE:EJ), Tejon Ranch Company (NYSE:TRC), Kennedy-Wilson Holdings Inc (NYSE:KW), and FirstService Corporation (USA) (NASDAQ:FSRV). This group of stocks are the members of the property management industry and their market caps are similar to RSE’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Acadia Realty Trust (NYSE:AKR)||5||0||6|
|E-House (China) Holdings Limited (ADR) (NYSE:EJ)||8||0||0|
|Tejon Ranch Company (NYSE:TRC)||8||1||1|
|Kennedy-Wilson Holdings Inc (NYSE:KW)||7||0||0|
|FirstService Corporation (USA) (NASDAQ:FSRV)||3||0||0|
With the returns exhibited by our studies, everyday investors must always keep an eye on hedge fund and insider trading activity, and Rouse Properties Inc (NYSE:RSE) applies perfectly to this mantra.