Is Hospitality Properties Trust (NYSE:HPT) a buy right now? The smart money is getting more optimistic. The number of bullish hedge fund positions went up by 2 recently.
To most shareholders, hedge funds are assumed to be slow, outdated investment tools of years past. While there are over 8000 funds with their doors open today, we at Insider Monkey choose to focus on the moguls of this group, about 450 funds. It is widely believed that this group oversees the majority of the smart money’s total capital, and by paying attention to their highest performing stock picks, we have deciphered a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outperformed 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 outclassed the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as integral, bullish insider trading sentiment is another way to parse down the investments you’re interested in. As the old adage goes: there are a variety of incentives for an executive to downsize shares of his or her company, but only one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this method if you know what to do (learn more here).
Now, let’s take a peek at the recent action encompassing Hospitality Properties Trust (NYSE:HPT).
What does the smart money think about Hospitality Properties Trust (NYSE:HPT)?
In preparation for this year, a total of 9 of the hedge funds we track were long in this stock, a change of 29% from the previous quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings significantly.
Of the funds we track, Richard S. Pzena’s Pzena Investment Management had the most valuable position in Hospitality Properties Trust (NYSE:HPT), worth close to $42.8 million, accounting for 0.4% of its total 13F portfolio. The second largest stake is held by Forward Management, managed by J. Alan Reid, Jr., which held a $39.8 million position; the fund has 2.8% of its 13F portfolio invested in the stock. Some other peers with similar optimism include David Dreman’s Dreman Value Management, Israel Englander’s Millennium Management and Cliff Asness’s AQR Capital Management.
As one would reasonably expect, some big names have been driving this bullishness. D E Shaw, managed by D. E. Shaw, initiated the largest position in Hospitality Properties Trust (NYSE:HPT). D E Shaw had 1.4 million invested in the company at the end of the quarter. David Costen Haley’s HBK Investments also made a $0.8 million investment in the stock during the quarter.
How are insiders trading Hospitality Properties Trust (NYSE:HPT)?
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 period, Hospitality Properties Trust (NYSE:HPT) has seen 1 unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Hospitality Properties Trust (NYSE:HPT). These stocks are Taubman Centers, Inc. (NYSE:TCO), Regency Centers Corp (NYSE:REG), Tanger Factory Outlet Centers Inc. (NYSE:SKT), Weingarten Realty Investors (NYSE:WRI), and CBL & Associates Properties, Inc. (NYSE:CBL). This group of stocks are the members of the reit – retail industry and their market caps are closest to HPT’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Taubman Centers, Inc. (NYSE:TCO)||14||2||4|
|Regency Centers Corp (NYSE:REG)||10||0||2|
|Tanger Factory Outlet Centers Inc. (NYSE:SKT)||9||1||7|
|Weingarten Realty Investors (NYSE:WRI)||12||0||1|
|CBL & Associates Properties, Inc. (NYSE:CBL)||9||3||3|
With the results demonstrated by our tactics, retail investors should always monitor hedge fund and insider trading activity, and Hospitality Properties Trust (NYSE:HPT) applies perfectly to this mantra.