Is Ares Commercial Real Estate Corp (ACRE) Going to Burn These Hedge Funds?

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Is Ares Commercial Real Estate Corp (NYSE:ACRE) a buy right now? Money managers are betting on the stock. The number of bullish hedge fund positions inched up by 5 in recent months.

In today’s marketplace, there are dozens of gauges investors can use to analyze publicly traded companies. Some of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best fund managers can outclass the S&P 500 by a significant margin (see just how much).


Equally as key, bullish insider trading sentiment is another way to parse down the world of equities. As the old adage goes: there are many motivations for an insider to drop shares of his or her company, but just one, very simple reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this strategy if you know where to look (learn more here).

Now, we’re going to take a peek at the recent action surrounding Ares Commercial Real Estate Corp (NYSE:ACRE).

What does the smart money think about Ares Commercial Real Estate Corp (NYSE:ACRE)?

Heading into Q2, a total of 11 of the hedge funds we track were long in this stock, a change of 83% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes meaningfully.

Of the funds we track, Dialectic Capital Management, managed by John Fichthorn, holds the most valuable position in Ares Commercial Real Estate Corp (NYSE:ACRE). Dialectic Capital Management has a $4.4 million position in the stock, comprising 0.6% of its 13F portfolio. The second largest stake is held by First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, which held a $4.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include J. Alan Reid, Jr.’s Forward Management, Bruce Silver’s Silver Capital Management LLC and Jim Simons’s Renaissance Technologies.

Now, specific money managers have been driving this bullishness. First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, assembled the most outsized position in Ares Commercial Real Estate Corp (NYSE:ACRE). First Pacific Advisors LLC had 4.2 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $0.5 million position during the quarter. The following funds were also among the new ACRE investors: Israel Englander’s Millennium Management, D. E. Shaw’s D E Shaw, and John Overdeck and David Siegel’s Two Sigma Advisors.

How have insiders been trading Ares Commercial Real Estate Corp (NYSE:ACRE)?

Insider purchases made by high-level executives is most useful when the company in question has seen transactions within the past 180 days. Over the latest six-month time period, Ares Commercial Real Estate Corp (NYSE:ACRE) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Ares Commercial Real Estate Corp (NYSE:ACRE). These stocks are Whitestone REIT (NYSE:WSR), Arbor Realty Trust, Inc. (NYSE:ABR), Gladstone Commercial Corporation (NASDAQ:GOOD), UMH Properties, Inc (NYSE:UMH), and Javelin Mortgage Investment Corp (NYSE:JMI). This group of stocks are the members of the reit – diversified industry and their market caps match ACRE’s market cap.

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