What’s a smart Medical Properties Trust, Inc. (NYSE:MPW) investor to do?
In the eyes of many market players, hedge funds are perceived as bloated, outdated financial tools of a forgotten age. Although there are more than 8,000 hedge funds trading in present day, this site aim at the top tier of this group, around 525 funds. It is assumed that this group controls most of the smart money’s total capital, and by paying attention to their highest quality picks, we’ve discovered a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per 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 outpaced the S&P 500 index by 33 percentage points in 11 months (find the details here).
Just as useful, positive insider trading activity is another way to analyze the investments you’re interested in. Just as you’d expect, there are lots of incentives for an insider to sell shares of his or her company, but just one, very clear reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this method if investors know where to look (learn more here).
Keeping this in mind, we’re going to discuss the recent info surrounding Medical Properties Trust, Inc. (NYSE:MPW).
What does the smart money think about Medical Properties Trust, Inc. (NYSE:MPW)?
In preparation for the third quarter, a total of 9 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially.
Out of the hedge funds we follow, Amy Minella’s Cardinal Capital had the largest position in Medical Properties Trust, Inc. (NYSE:MPW), worth close to $21.1 million, comprising 1.3% of its total 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which held a $10.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds that hold long positions include Cliff Asness’s AQR Capital Management, Brian Ashford-Russell and Tim Woolley’s Polar Capital and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
As Medical Properties Trust, Inc. (NYSE:MPW) has witnessed declining interest from the smart money’s best and brightest, it’s easy to see that there exists a select few funds that elected to cut their positions entirely heading into Q2. It’s worth mentioning that Richard Driehaus’s Driehaus Capital dumped the largest position of the 450+ funds we track, comprising an estimated $7.3 million in stock. Israel Englander’s fund, Millennium Management, also dropped its stock, about $0.9 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Medical Properties Trust, Inc. (NYSE:MPW)?
Insider buying is best served when the company in focus has experienced transactions within the past 180 days. Over the last half-year time period, Medical Properties Trust, Inc. (NYSE:MPW) 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 Medical Properties Trust, Inc. (NYSE:MPW). These stocks are LTC Properties Inc (NYSE:LTC), Omega Healthcare Investors Inc (NYSE:OHI), National Health Investors Inc (NYSE:NHI), Healthcare Trust Of America Inc (NYSE:HTA), and Healthcare Realty Trust Inc (NYSE:HR). This group of stocks are the members of the reit – healthcare facilities industry and their market caps are similar to MPW’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|LTC Properties Inc (NYSE:LTC)||7||0||0|
|Omega Healthcare Investors Inc (NYSE:OHI)||13||0||0|
|National Health Investors Inc (NYSE:NHI)||8||0||0|
|Healthcare Trust Of America Inc (NYSE:HTA)||6||0||0|
|Healthcare Realty Trust Inc (NYSE:HR)||10||0||0|
Using the returns demonstrated by Insider Monkey’s research, regular investors must always pay attention to hedge fund and insider trading sentiment, and Medical Properties Trust, Inc. (NYSE:MPW) is an important part of this process.