Is PS Business Parks Inc (PSB) Going to Burn These Hedge Funds?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Citadel Investment Group. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was D E Shaw).

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as PS Business Parks Inc (NYSE:PSB) but similarly valued. These stocks are National Health Investors Inc (NYSE:NHI), Fresh Del Monte Produce Inc (NYSE:FDP), Worthington Industries, Inc. (NYSE:WOR), and Science Applications International Corp (NYSE:SAIC). All of these stocks’ market caps are closest to PSB’s market cap.

As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $107 million. That figure was $90 million in PSB’s case. Fresh Del Monte Produce Inc (NYSE:FDP) is the most popular stock in this table. On the other hand National Health Investors Inc (NYSE:NHI) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks PS Business Parks Inc (NYSE:PSB) is even less popular than NHI. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

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