Brandywine Realty Trust (NYSE:BDN) was in 11 hedge funds’ portfolio at the end of the fourth quarter of 2012. BDN shareholders have witnessed an increase in enthusiasm from smart money of late. There were 7 hedge funds in our database with BDN holdings at the end of the previous quarter.
According to most shareholders, hedge funds are perceived as underperforming, outdated investment vehicles of the past. While there are over 8000 funds trading today, we choose to focus on the top tier of this group, close to 450 funds. It is estimated that this group oversees most of the hedge fund industry’s total capital, and by watching their top stock picks, we have spotted a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 topped the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Equally as key, positive insider trading sentiment is a second way to parse down the financial markets. As the old adage goes: there are a number of motivations for an insider to downsize shares of his or her company, but only one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this strategy if piggybackers understand where to look (learn more here).
Now, it’s important to take a glance at the key action regarding Brandywine Realty Trust (NYSE:BDN).
What have hedge funds been doing with Brandywine Realty Trust (NYSE:BDN)?
At year’s end, a total of 11 of the hedge funds we track were long in this stock, a change of 57% from the third quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably.
Of the funds we track, David Dreman’s Dreman Value Management had the biggest position in Brandywine Realty Trust (NYSE:BDN), worth close to $33 million, accounting for 0.9% of its total 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $7 million position; 0% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.
As industrywide interest jumped, specific money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, created the largest position in Brandywine Realty Trust (NYSE:BDN). Millennium Management had 4 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $4 million position during the quarter. The following funds were also among the new BDN investors: Anil Stevens and Glenn Shapiro’s Parameter Capital Management, Steven Cohen’s SAC Capital Advisors, and Andy Redleaf’s Whitebox Advisors.
Insider trading activity in Brandywine Realty Trust (NYSE:BDN)
Bullish insider trading is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the latest six-month time frame, Brandywine Realty Trust (NYSE:BDN) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Brandywine Realty Trust (NYSE:BDN). These stocks are Newcastle Investment Corp. (NYSE:NCT), Spirit Realty Capital Inc (NYSE:SRC), Lexington Realty Trust (NYSE:LXP), Redwood Trust, Inc. (NYSE:RWT), and PS Business Parks Inc (NYSE:PSB). All of these stocks are in the reit – diversified industry and their market caps are closest to BDN’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Newcastle Investment Corp. (NYSE:NCT)||21||2||0|
|Spirit Realty Capital Inc (NYSE:SRC)||17||0||0|
|Lexington Realty Trust (NYSE:LXP)||14||0||4|
|Redwood Trust, Inc. (NYSE:RWT)||9||0||0|
|PS Business Parks Inc (NYSE:PSB)||12||0||5|
With the results demonstrated by the aforementioned studies, everyday investors must always monitor hedge fund and insider trading activity, and Brandywine Realty Trust (NYSE:BDN) shareholders fit into this picture quite nicely.