Is Lexington Realty Trust (NYSE:LXP) a splendid investment right now? Investors who are in the know are turning bullish. The number of long hedge fund positions improved by 6 recently.
To most traders, hedge funds are perceived as underperforming, old financial tools of yesteryear. While there are over 8000 funds with their doors open today, we at Insider Monkey look at the bigwigs of this club, around 450 funds. Most estimates calculate that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by keeping an eye on their top stock picks, we have brought to light a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as integral, optimistic insider trading activity is another way to break down the marketplace. Obviously, there are lots of stimuli for an executive to cut shares of his or her company, but only one, very clear reason why they would buy. Many empirical studies have demonstrated the impressive potential of this method if piggybackers know where to look (learn more here).
Now, let’s take a look at the key action encompassing Lexington Realty Trust (NYSE:LXP).
How are hedge funds trading Lexington Realty Trust (NYSE:LXP)?
Heading into 2013, a total of 14 of the hedge funds we track were long in this stock, a change of 75% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably.
Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Lexington Realty Trust (NYSE:LXP). Royce & Associates has a $18 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Forward Management, managed by J. Alan Reid, Jr., which held a $16 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Cliff Asness’s AQR Capital Management and Richard Driehaus’s Driehaus Capital.
With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Driehaus Capital, managed by Richard Driehaus, created the largest position in Lexington Realty Trust (NYSE:LXP). Driehaus Capital had 4 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $1 million position during the quarter. The other funds with brand new LXP positions are Israel Englander’s Millennium Management, Steven Cohen’s SAC Capital Advisors, and Andy Redleaf’s Whitebox Advisors.
What have insiders been doing with Lexington Realty Trust (NYSE:LXP)?
Insider purchases made by high-level executives is most useful when the primary stock in question has experienced transactions within the past 180 days. Over the latest half-year time period, Lexington Realty Trust (NYSE:LXP) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Lexington Realty Trust (NYSE:LXP). These stocks are Newcastle Investment Corp. (NYSE:NCT), Brandywine Realty Trust (NYSE:BDN), PS Business Parks Inc (NYSE:PSB), Chimera Investment Corporation (NYSE:CIM), and Redwood Trust, Inc. (NYSE:RWT). This group of stocks are the members of the reit – diversified industry and their market caps resemble LXP’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Newcastle Investment Corp. (NYSE:NCT)||21||2||0|
|Brandywine Realty Trust (NYSE:BDN)||11||0||4|
|PS Business Parks Inc (NYSE:PSB)||12||0||5|
|Chimera Investment Corporation (NYSE:CIM)||22||0||0|
|Redwood Trust, Inc. (NYSE:RWT)||9||0||0|
With the results demonstrated by our time-tested strategies, retail investors should always monitor hedge fund and insider trading sentiment, and Lexington Realty Trust (NYSE:LXP) applies perfectly to this mantra.
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