According to most shareholders, hedge funds are perceived as slow, outdated financial tools of years past. While there are over 8000 funds in operation at present, we at Insider Monkey choose to focus on the aristocrats of this club, about 450 funds. It is widely believed that this group controls the lion’s share of the smart money’s total asset base, and by tracking their top picks, we have come up with a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as key, optimistic insider trading activity is another way to break down the financial markets. As the old adage goes: there are plenty of reasons for an executive to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the impressive potential of this strategy if investors understand what to do (learn more here).
Keeping this in mind, we’re going to take a peek at the latest action regarding Health Care REIT, Inc. (NYSE:HCN).
What have hedge funds been doing with Health Care REIT, Inc. (NYSE:HCN)?
At year’s end, a total of 16 of the hedge funds we track held long positions in this stock, a change of -11% from the third quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings meaningfully.
Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Health Care REIT, Inc. (NYSE:HCN). Citadel Investment Group has a $181 million position in the stock, comprising 0.3% of its 13F portfolio. On Citadel Investment Group’s heels is D E Shaw, managed by D. E. Shaw, which held a $100 million position; 0% of its 13F portfolio is allocated to the company. Some other hedgies that hold long positions include Jim Simons’s Renaissance Technologies, Jeffrey Furber’s AEW Capital Management and Phill Gross and Robert Atchinson’s Adage Capital Management.
Judging by the fact that Health Care REIT, Inc. (NYSE:HCN) has witnessed declining sentiment from hedge fund managers, we can see that there exists a select few money managers that elected to cut their full holdings heading into 2013. At the top of the heap, Clint Carlson’s Carlson Capital said goodbye to the biggest position of the “upper crust” of funds we monitor, valued at about $70 million in stock.. James E. Flynn’s fund, Deerfield Management, also dropped its stock, about $3 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 2 funds heading into 2013.
What do corporate executives and insiders think about Health Care REIT, Inc. (NYSE:HCN)?
Insider buying is best served when the company in focus has seen transactions within the past 180 days. Over the last 180-day time frame, Health Care REIT, Inc. (NYSE:HCN) has seen 1 unique insiders buying, and 7 insider sales (see the details of insider trades here).
With the results demonstrated by our time-tested strategies, retail investors must always watch hedge fund and insider trading activity, and Health Care REIT, Inc. (NYSE:HCN) is no exception.
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