Is Host Hotels and Resorts Inc (NYSE:HST) a buy right now? Hedge funds are taking a bearish view. The number of bullish hedge fund positions shrunk by 5 in recent months.
In the eyes of most market participants, hedge funds are seen as slow, outdated investment tools of the past. While there are more than 8000 funds trading today, we hone in on the upper echelon of this club, about 450 funds. Most estimates calculate that this group oversees the majority of the smart money’s total capital, and by paying attention to their highest performing picks, we have found a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 25 percentage points in 6.5 month (explore the details and some picks here).
Just as integral, optimistic insider trading activity is another way to parse down the marketplace. Obviously, there are plenty of incentives for a bullish insider to sell shares of his or her company, but just one, very clear reason why they would buy. Plenty of academic studies have demonstrated the impressive potential of this strategy if shareholders understand what to do (learn more here).
Now, it’s important to take a peek at the latest action encompassing Host Hotels and Resorts Inc (NYSE:HST).
How have hedgies been trading Host Hotels and Resorts Inc (NYSE:HST)?
Heading into 2013, a total of 10 of the hedge funds we track were long in this stock, a change of -33% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly.
Of the funds we track, Jeffrey Furber’s AEW Capital Management had the most valuable position in Host Hotels and Resorts Inc (NYSE:HST), worth close to $142 million, accounting for 3.7% of its total 13F portfolio. The second largest stake is held by Ken Heebner of Capital Growth Management, with a $98 million position; the fund has 2.6% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Steven Cohen’s SAC Capital Advisors, Ken Griffin’s Citadel Investment Group and Phill Gross and Robert Atchinson’s Adage Capital Management.
Seeing as Host Hotels and Resorts Inc (NYSE:HST) has experienced bearish sentiment from hedge fund managers, it’s safe to say that there was a specific group of hedge funds that decided to sell off their positions entirely at the end of the year. Interestingly, Malcolm Fairbairn’s Ascend Capital cut the largest position of the 450+ funds we monitor, worth close to $18 million in stock.. Israel Englander’s fund, Millennium Management, also dropped its stock, about $1 million worth. These moves are important to note, as total hedge fund interest dropped by 5 funds at the end of the year.
What do corporate executives and insiders think about Host Hotels and Resorts Inc (NYSE:HST)?
Insider purchases made by high-level executives is best served when the company we’re looking at has seen transactions within the past 180 days. Over the last half-year time period, Host Hotels and Resorts Inc (NYSE:HST) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Host Hotels and Resorts Inc (NYSE:HST). These stocks are Strategic Hotels and Resorts Inc (NYSE:BEE), DiamondRock Hospitality Company (NYSE:DRH), Sunstone Hotel Investors Inc (NYSE:SHO), LaSalle Hotel Properties (NYSE:LHO), and RLJ Lodging Trust (NYSE:RLJ). All of these stocks are in the reit – hotel/motel industry and their market caps match HST’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Strategic Hotels and Resorts Inc (NYSE:BEE)||13||0||0|
|DiamondRock Hospitality Company (NYSE:DRH)||6||0||0|
|Sunstone Hotel Investors Inc (NYSE:SHO)||16||0||1|
|LaSalle Hotel Properties (NYSE:LHO)||8||0||1|
|RLJ Lodging Trust (NYSE:RLJ)||10||0||1|
With the results shown by Insider Monkey’s time-tested strategies, retail investors should always monitor hedge fund and insider trading activity, and Host Hotels and Resorts Inc (NYSE:HST) 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.