Is it smart to be bullish on Ashford Hospitality Trust, Inc. (NYSE:AHT)?
Now, according to many traders, hedge funds are perceived as useless, old investment vehicles of a period lost to current times. Although there are over 8,000 hedge funds with their doors open in present day, Insider Monkey looks at the top tier of this group, around 525 funds. It is assumed that this group oversees the majority of all hedge funds’ total assets, and by monitoring their highest quality stock picks, we’ve deciphered a number of investment strategies that have historically outpaced the S&P 500. 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 started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Just as crucial, positive insider trading activity is a second way to analyze the world of equities. As the old adage goes: there are a variety of stimuli for an upper level exec to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this tactic if “monkeys” know what to do (learn more here).
Thus, let’s study the latest info about Ashford Hospitality Trust, Inc. (NYSE:AHT).
What have hedge funds been doing with Ashford Hospitality Trust, Inc. (NYSE:AHT)?
Heading into Q3, a total of 18 of the hedge funds we track held long positions in this stock, a change of 13% from the first quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly.
According to our 13F database, Long Pond Capital, managed by John Khoury, holds the largest position in Ashford Hospitality Trust, Inc. (NYSE:AHT). Long Pond Capital has a $32.2 million position in the stock, comprising 5.7% of its 13F portfolio. Coming in second is Forward Management, managed by J. Alan Reid, Jr., which held a $18 million position; 1.5% of its 13F portfolio is allocated to the company. Remaining hedge funds that are bullish include Cliff Asness’s AQR Capital Management, David Dreman’s Dreman Value Management and Robert Jaffe’s Force Capital.
Consequently, particular hedge funds were leading the bulls’ herd. Long Pond Capital, managed by John Khoury, initiated the most outsized position in Ashford Hospitality Trust, Inc. (NYSE:AHT). Long Pond Capital had 32.2 million invested in the company at the end of the quarter. J. Alan Reid, Jr.’s Forward Management also initiated a $18 million position during the quarter. The other funds with new positions in the stock are Cliff Asness’s AQR Capital Management, David Dreman’s Dreman Value Management, and Robert Jaffe’s Force Capital.
Insider trading activity in Ashford Hospitality Trust, Inc. (NYSE:AHT)
Insider buying made by high-level executives is most useful when the company in question has experienced transactions within the past six months. Over the latest 180-day time frame, Ashford Hospitality Trust, Inc. (NYSE:AHT) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to Ashford Hospitality Trust, Inc. (NYSE:AHT). These stocks are DiamondRock Hospitality Company (NYSE:DRH), Strategic Hotels and Resorts Inc (NYSE:BEE), Pebblebrook Hotel Trust (NYSE:PEB), Chesapeake Lodging Trust (NYSE:CHSP), and FelCor Lodging Trust Incorporated (NYSE:FCH). This group of stocks are the members of the reit – hotel/motel industry and their market caps resemble AHT’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|DiamondRock Hospitality Company (NYSE:DRH)||13||0||0|
|Strategic Hotels and Resorts Inc (NYSE:BEE)||22||0||0|
|Pebblebrook Hotel Trust (NYSE:PEB)||5||0||0|
|Chesapeake Lodging Trust (NYSE:CHSP)||9||0||0|
|FelCor Lodging Trust Incorporated (NYSE:FCH)||16||0||0|
Using the returns shown by the previously mentioned strategies, regular investors must always track hedge fund and insider trading sentiment, and Ashford Hospitality Trust, Inc. (NYSE:AHT) is no exception.