Hedge Funds Are Dumping Boston Properties, Inc. (BXP)

Is Boston Properties, Inc. (NYSE:BXP) a good investment?

To many investors, hedge funds are viewed as bloated, outdated financial vehicles of an era lost to time. Although there are more than 8,000 hedge funds in operation currently, Insider Monkey looks at the top tier of this group, close to 525 funds. It is widely held that this group oversees the majority of all hedge funds’ total assets, and by paying attention to their highest quality equity investments, we’ve identified a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a 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 trumped 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 another way to look at the financial markets. Obviously, there are a variety of motivations for an upper level exec to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the useful potential of this method if shareholders understand where to look (learn more here).

What’s more, it’s important to examine the recent info surrounding Boston Properties, Inc. (NYSE:BXP).

Hedge fund activity in Boston Properties, Inc. (NYSE:BXP)

Heading into Q3, a total of 17 of the hedge funds we track held long positions in this stock, a change of -19% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably.

Boston Properties, Inc. (NYSE:BXP)When using filings from the hedgies we track, Jeffrey Furber’s AEW Capital Management had the largest position in Boston Properties, Inc. (NYSE:BXP), worth close to $205 million, comprising 5.3% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $99.5 million position; 0.2% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include D. E. Shaw’s D E Shaw, Ken Heebner’s Capital Growth Management and Phill Gross and Robert Atchinson’s Adage Capital Management.

Since Boston Properties, Inc. (NYSE:BXP) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of hedge funds that slashed their positions entirely last quarter. Intriguingly, Jim Simons’s Renaissance Technologies sold off the biggest investment of all the hedgies we track, comprising about $54.8 million in stock, and Matthew Tewksbury of Stevens Capital Management was right behind this move, as the fund dumped about $13.5 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 4 funds last quarter.

How have insiders been trading Boston Properties, Inc. (NYSE:BXP)?

Bullish insider trading is at its handiest when the primary stock in question has experienced transactions within the past 180 days. Over the latest 180-day time period, Boston Properties, Inc. (NYSE:BXP) has seen zero unique insiders purchasing, 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 Boston Properties, Inc. (NYSE:BXP). These stocks are Piedmont Office Realty Trust, Inc. (NYSE:PDM), Kilroy Realty Corp (NYSE:KRC), Alexandria Real Estate Equities Inc (NYSE:ARE), Liberty Property Trust (NYSE:LRY), and Digital Realty Trust, Inc. (NYSE:DLR). All of these stocks are in the reit – office industry and their market caps resemble BXP’s market cap.