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Is First Industrial Realty Trust, Inc. (FR) Going to Burn These Hedge Funds?: CubeSmart (CUBE), DCT Industrial Trust Inc. (DCT)

First Industrial Realty Trust, Inc. (NYSE:FR) has experienced a decrease in support from the world’s most elite money managers of late.

First Industrial Realty Trust, Inc. (NYSE:FR)

In today’s marketplace, there are plenty of methods market participants can use to analyze publicly traded companies. Two of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite hedge fund managers can beat the S&P 500 by a significant amount (see just how much).

Just as integral, optimistic insider trading activity is a second way to parse down the stock market universe. There are many reasons for an insider to cut shares of his or her company, but only one, very simple reason why they would buy. Many academic studies have demonstrated the valuable potential of this tactic if piggybackers understand where to look (learn more here).

With these “truths” under our belt, it’s important to take a peek at the key action encompassing First Industrial Realty Trust, Inc. (NYSE:FR).

How have hedgies been trading First Industrial Realty Trust, Inc. (NYSE:FR)?

At year’s end, a total of 13 of the hedge funds we track were bullish in this stock, a change of -13% from the third quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings significantly.

Of the funds we track, Martin Whitman’s Third Avenue Management had the biggest position in First Industrial Realty Trust, Inc. (NYSE:FR), worth close to $61 million, comprising 1.3% of its total 13F portfolio. The second largest stake is held by Robert Jaffe of Force Capital, with a $15 million position; the fund has 2.4% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include D. E. Shaw’s D E Shaw, Cliff Asness’s AQR Capital Management and Jim Simons’s Renaissance Technologies.

Because First Industrial Realty Trust, Inc. (NYSE:FR) has faced falling interest from hedge fund managers, we can see that there were a few hedge funds that elected to cut their positions entirely in Q4. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the largest investment of all the hedgies we monitor, totaling an estimated $0 million in stock.. Mike Vranos’s fund, Ellington, also said goodbye to its stock, about $0 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds in Q4.

Insider trading activity in First Industrial Realty Trust, Inc. (NYSE:FR)

Insider buying is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the latest six-month time period, First Industrial Realty Trust, Inc. (NYSE:FR) has experienced 1 unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to First Industrial Realty Trust, Inc. (NYSE:FR). These stocks are CubeSmart (NYSE:CUBE), DCT Industrial Trust Inc. (NYSE:DCT), Sovran Self Storage Inc (NYSE:SSS), Eastgroup Properties Inc (NYSE:EGP), and Potlatch Corporation (NASDAQ:PCH). All of these stocks are in the reit – industrial industry and their market caps are similar to FR’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
CubeSmart (NYSE:CUBE) 4 0 1
DCT Industrial Trust Inc. (NYSE:DCT) 7 0 2
Sovran Self Storage Inc (NYSE:SSS) 10 0 4
Eastgroup Properties Inc (NYSE:EGP) 2 0 4
Potlatch Corporation (NASDAQ:PCH) 11 1 9

With the results demonstrated by the aforementioned studies, everyday investors must always monitor hedge fund and insider trading sentiment, and First Industrial Realty Trust, Inc. (NYSE:FR) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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.

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