Hedge Funds Are Betting On Home Properties, Inc. (HME)

Page 1 of 2

Home Properties, Inc. (NYSE:HME) was in 8 hedge funds’ portfolio at the end of the fourth quarter of 2012. HME shareholders have witnessed an increase in activity from the world’s largest hedge funds of late. There were 6 hedge funds in our database with HME holdings at the end of the previous quarter.

To the average investor, there are dozens of metrics shareholders can use to watch the equity markets. A couple of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite fund managers can outpace the broader indices by a superb amount (see just how much).

Just as integral, bullish insider trading activity is another way to break down the marketplace. Obviously, there are lots of stimuli for a bullish insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Several academic studies have demonstrated the useful potential of this tactic if investors know what to do (learn more here).

With these “truths” under our belt, let’s take a gander at the key action surrounding Home Properties, Inc. (NYSE:HME).

What have hedge funds been doing with Home Properties, Inc. (NYSE:HME)?

In preparation for this year, a total of 8 of the hedge funds we track held long positions in this stock, a change of 33% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes considerably.

Of the funds we track, Renaissance Technologies, managed by Jim Simons, holds the biggest position in Home Properties, Inc. (NYSE:HME). Renaissance Technologies has a $12.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Two Sigma Advisors, managed by John Overdeck and David Siegel, which held a $5.2 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Cliff Asness’s AQR Capital Management, and J. Alan Reid, Jr.’s Forward Management.

Home Properties Inc. – Highest Yield In The Apartment REITsWith a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Renaissance Technologies, managed by Jim Simons, initiated the biggest position in Home Properties, Inc. (NYSE:HME). Renaissance Technologies had 12.7 million invested in the company at the end of the quarter. Louis Bacon’s Moore Global Investments also initiated a $3.1 million position during the quarter. The only other fund with a new position in the stock is David Costen Haley’s HBK Investments.

Insider trading activity in Home Properties, Inc. (NYSE:HME)

Bullish insider trading is best served when the company in focus has experienced transactions within the past six months. Over the latest 180-day time frame, Home Properties, Inc. (NYSE:HME) has experienced 1 unique insiders purchasing, and 10 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Home Properties, Inc. (NYSE:HME). These stocks are Post Properties Inc (NYSE:PPS), Hatteras Financial Corp. (NYSE:HTS), BRE Properties Inc (NYSE:BRE), Mid America Apartment Communities Inc (NYSE:MAA), and Equity Lifestyle Properties, Inc. (NYSE:ELS). This group of stocks belong to the reit – residential industry and their market caps are similar to HME’s market cap.

Page 1 of 2