It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 5.2% over the 12-month period ending October 30, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey (as of September 2014) generated a return of 9.5% over the same time span, with 63% of these stocks outperforming the benchmark. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Arbor Realty Trust, Inc. (NYSE:ABR).
Is Arbor Realty Trust, Inc. (NYSE:ABR) a buy right now? Hedge funds are getting less optimistic. The number of long hedge fund bets decreased by 1 in recent months. ABR was in 9 hedge funds’ portfolios at the end of September. There were 10 hedge funds in our database with ABR holdings at the end of the previous quarter. At the end of this article we will also compare ABR to other stocks including Parker Drilling Company (NYSE:PKD), Medifast, Inc. (NYSE:MED), and Safeguard Scientifics, Inc (NYSE:SFE) to get a better sense of its popularity.
Keeping this in mind, we’re going to take a glance at the fresh action encompassing Arbor Realty Trust, Inc. (NYSE:ABR).
What have hedge funds been doing with Arbor Realty Trust, Inc. (NYSE:ABR)?
Heading into Q4, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the second quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Jim Simons’ Renaissance Technologies has the biggest position in Arbor Realty Trust, Inc. (NYSE:ABR), worth close to $1.4 million, amounting to less than 0.1% of its total 13F portfolio. Coming in second is D E Shaw, which holds a $1.3 million position; less than 0.1% of its 13F portfolio is allocated to the company. Some other professional money managers that hold long positions comprise John Overdeck and David Siegel’s Two Sigma Advisors, J. Alan Reid, Jr.’s Forward Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.