RAIT Financial Trust (NYSE:RAS) has experienced an increase in enthusiasm from smart money recently.
In the 21st century investor’s toolkit, there are many gauges market participants can use to watch Mr. Market. A couple of the most useful are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass their index-focused peers by a solid amount (see just how much).
Just as key, positive insider trading activity is a second way to break down the marketplace. There are a variety of stimuli for an insider to drop shares of his or her company, but just one, very simple reason why they would buy. Several empirical studies have demonstrated the valuable potential of this tactic if “monkeys” know where to look (learn more here).
With these “truths” under our belt, let’s take a gander at the latest action surrounding RAIT Financial Trust (NYSE:RAS).
Hedge fund activity in RAIT Financial Trust (NYSE:RAS)
At the end of the fourth quarter, a total of 10 of the hedge funds we track held long positions in this stock, a change of 43% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably.
Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in RAIT Financial Trust (NYSE:RAS). Royce & Associates has a $4 million position in the stock, comprising 0% of its 13F portfolio. Coming in second is Cliff Asness of AQR Capital Management, with a $1 million position; the fund has 0% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include J. Alan Reid, Jr.’s Forward Management, D. E. Shaw’s D E Shaw and Ken Griffin’s Citadel Investment Group.
With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. AQR Capital Management, managed by Cliff Asness, established the largest position in RAIT Financial Trust (NYSE:RAS). AQR Capital Management had 1 million invested in the company at the end of the quarter. Douglas W. Case’s Advanced Investment Partners also initiated a $0 million position during the quarter. The following funds were also among the new RAS investors: Brian Taylor’s Pine River Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors.
What have insiders been doing with RAIT Financial Trust (NYSE:RAS)?
Insider buying is most useful when the company in question has experienced transactions within the past 180 days. Over the latest six-month time period, RAIT Financial Trust (NYSE:RAS) has experienced 2 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to RAIT Financial Trust (NYSE:RAS). These stocks are One Liberty Properties, Inc. (NYSE:OLP), AG Mortgage Investment Trust Inc (NYSE:MITT), Excel Trust Inc (NYSE:EXL), Apollo Commercial Real Est. Finance Inc (NYSE:ARI), and Winthrop Realty Trust (NYSE:FUR). This group of stocks are in the reit – diversified industry and their market caps are similar to RAS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|One Liberty Properties, Inc. (NYSE:OLP)||5||3||3|
|AG Mortgage Investment Trust Inc (NYSE:MITT)||11||2||1|
|Excel Trust Inc (NYSE:EXL)||4||1||0|
|Apollo Commercial Real Est. Finance Inc (NYSE:ARI)||11||0||2|
|Winthrop Realty Trust (NYSE:FUR)||7||0||0|
With the results exhibited by Insider Monkey’s research, retail investors must always pay attention to hedge fund and insider trading activity, and RAIT Financial Trust (NYSE:RAS) applies perfectly to this mantra.
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.