Before we spend many hours researching a company, we’d like to analyze what hedge funds and billionaire investors think of the stock first. We would like to do so because the elite investors’ consensus returns have been exceptional. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last 12 months ending in October 30. Sixty three percent of these 30 stocks outperformed the market. Although the elite funds occasionally have their duds, such as Micron and Anadarko Petroleum, which fell 50% and 26%, respectively, during the same time period, the hedge fund picks seem to work on average. In the following paragraphs, we find out what the billionaire investors and hedge funds think of American Assets Trust, Inc (NYSE:AAT).
Is American Assets Trust, Inc (NYSE:AAT) a healthy stock for your portfolio? The smart money is becoming less hopeful. The number of bullish hedge fund bets shrunk by 3 lately. AAT was in 7 hedge funds’ portfolios at the end of September. There were 10 hedge funds in our database with AAT holdings at the end of the previous quarter. At the end of this article we will also compare AAT to other stocks, including Kemper Corporation (NYSE:KMPR), InterDigital, Inc. (NASDAQ:IDCC), and Evercore Partners Inc. (NYSE:EVR) to get a better sense of its popularity.
Follow American Assets Trust Inc. (NYSE:AAT)
Follow American Assets Trust Inc. (NYSE:AAT)
In today’s marketplace there are a multitude of tools investors can use to analyze publicly traded companies. Two of the most under-the-radar tools are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the best fund managers can outclass the market by a healthy amount (see the details here).
Keeping this in mind, we’re going to take a glance at the latest action regarding American Assets Trust, Inc (NYSE:AAT).
How have hedgies been trading American Assets Trust, Inc (NYSE:AAT)?
At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, down by 30% from the second quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, AEW Capital Management, managed by Jeffrey Furber, holds the number one position in American Assets Trust, Inc (NYSE:AAT) worth an estimated $56.7 million and comprising 1.3% of its 13F portfolio. Coming in second is Millennium Management, led by Israel Englander, holding a $21.6 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Some other members of the smart money with similar optimism comprise J. Alan Reid, Jr.’s Forward Management, Cliff Asness’s AQR Capital Management and Millennium Management Subsidiary’s Decade Capital Management.
Due to the fact that American Assets Trust, Inc (NYSE:AAT) has experienced a drop in interest from the smart money, it’s easy to see that there were a few hedge funds who sold off their entire stakes in the third quarter. It’s worth mentioning that John Overdeck and David Siegel’s Two Sigma Advisors said goodbye to the largest investment of the “upper crust” of funds tracked by Insider Monkey, worth about $0.7 million in stock. Mike Vranos’s fund, Ellington, also dumped its stock, about $0.3 million worth of AAT shares. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds in the third quarter.
Let’s check out hedge fund activity in other stocks similar to American Assets Trust, Inc (NYSE:AAT). These stocks are Kemper Corporation (NYSE:KMPR), InterDigital, Inc. (NASDAQ:IDCC), Evercore Partners Inc. (NYSE:EVR), and COMSCORE, Inc. (NASDAQ:SCOR). This group of stocks’ market values match AAT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KMPR | 6 | 10389 | -1 |
| IDCC | 19 | 294575 | -5 |
| EVR | 19 | 112684 | -3 |
| SCOR | 30 | 178273 | 9 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $149 million. That figure was $88 million in AAT’s case, a negative signal. COMSCORE, Inc. (NASDAQ:SCOR) is the most popular stock in this table. On the other hand Kemper Corporation (NYSE:KMPR) is the least popular one with only 6 bullish hedge fund positions. American Assets Trust, Inc (NYSE:AAT) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SCOR might be a better candidate to consider a long position.
