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Hedge Funds Are Selling Mack Cali Realty Corp (CLI): Highwoods Properties Inc (HIW), American Realty Capital Trust Inc (ARCT)

Mack Cali Realty Corp (NYSE:CLI) was in 10 hedge funds’ portfolio at the end of December. CLI shareholders have witnessed a decrease in enthusiasm from smart money lately. There were 10 hedge funds in our database with CLI positions at the end of the previous quarter.


If you’d ask most market participants, hedge funds are perceived as unimportant, old financial tools of years past. While there are more than 8000 funds trading today, we choose to focus on the upper echelon of this group, close to 450 funds. It is estimated that this group oversees most of the smart money’s total capital, and by tracking their top investments, we have unsheathed a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

Equally as integral, optimistic insider trading activity is a second way to break down the marketplace. Obviously, there are many reasons for an insider to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the market-beating potential of this strategy if investors understand where to look (learn more here).

With these “truths” under our belt, it’s important to take a gander at the recent action surrounding Mack Cali Realty Corp (NYSE:CLI).

How have hedgies been trading Mack Cali Realty Corp (NYSE:CLI)?

Heading into 2013, a total of 10 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes significantly.

Of the funds we track, Ken Fisher’s Fisher Asset Management had the largest position in Mack Cali Realty Corp (NYSE:CLI), worth close to $33 million, accounting for 0.1% of its total 13F portfolio. Coming in second is Chuck Royce of Royce & Associates, with a $12 million position; the fund has 0% of its 13F portfolio invested in the stock. Other peers with similar optimism include J. Alan Reid, Jr.’s Forward Management, Ken Gray and Steve Walsh’s Bryn Mawr Capital and Ken Griffin’s Citadel Investment Group.

Because Mack Cali Realty Corp (NYSE:CLI) has witnessed declining sentiment from hedge fund managers, logic holds that there was a specific group of hedgies who sold off their positions entirely last quarter. Interestingly, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners sold off the largest investment of the “upper crust” of funds we key on, valued at about $0 million in stock. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How have insiders been trading Mack Cali Realty Corp (NYSE:CLI)?

Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has experienced transactions within the past six months. Over the latest six-month time period, Mack Cali Realty Corp (NYSE:CLI) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Mack Cali Realty Corp (NYSE:CLI). These stocks are Highwoods Properties Inc (NYSE:HIW), American Realty Capital Trust Inc (NASDAQ:ARCT), Corporate Office Properties Trust (NYSE:OFC), CommonWealth REIT (NYSE:CWH), and Brookfield Canada Office Properties (NYSE:BOXC). All of these stocks are in the reit – office industry and their market caps resemble CLI’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Highwoods Properties Inc (NYSE:HIW) 5 1 7
American Realty Capital Trust Inc (NASDAQ:ARCT) 23 0 0
Corporate Office Properties Trust (NYSE:OFC) 5 0 6
CommonWealth REIT (NYSE:CWH) 12 0 0
Brookfield Canada Office Properties (NYSE:BOXC) 2 0 0

With the results shown by Insider Monkey’s tactics, everyday investors should always monitor hedge fund and insider trading sentiment, and Mack Cali Realty Corp (NYSE:CLI) is an important part of this process.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.

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