Is Senior Housing Properties Trust (NYSE:SNH) a buy right now? The best stock pickers are getting less bullish. The number of long hedge fund positions stayed the same which is a slightly negative development in our experience
If you’d ask most market participants, hedge funds are perceived as underperforming, old investment tools of yesteryear. While there are more than 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the bigwigs of this group, about 450 funds. It is widely believed that this group controls the lion’s share of the hedge fund industry’s total asset base, and by watching their highest performing picks, we have identified a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 23.3 percentage points in 8 months (check out a sample of our picks).
Just as integral, optimistic insider trading activity is a second way to parse down the investments you’re interested in. Obviously, there are many motivations for an executive to downsize shares of his or her company, but only one, very simple reason why they would buy. Various empirical studies have demonstrated the valuable potential of this method if shareholders understand where to look (learn more here).
With these “truths” under our belt, it’s important to take a peek at the recent action surrounding Senior Housing Properties Trust (NYSE:SNH).
What have hedge funds been doing with Senior Housing Properties Trust (NYSE:SNH)?
At the end of the first quarter, a total of 9 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially.
When looking at the hedgies we track, Ken Fisher’s Fisher Asset Management had the biggest position in Senior Housing Properties Trust (NYSE:SNH), worth close to $53.2 million, accounting for 0.1% of its total 13F portfolio. Coming in second is Clint Carlson of Carlson Capital, with a $9.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and Cliff Asness’s AQR Capital Management.
Because Senior Housing Properties Trust (NYSE:SNH) has faced a declination in interest from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of funds who sold off their full holdings last quarter. Interestingly, Jim Simons’s Renaissance Technologies cut the biggest position of all the hedgies we monitor, valued at an estimated $0.4 million in stock.. Matthew Hulsizer’s fund, PEAK6 Capital Management, also dumped its stock, about $0.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about Senior Housing Properties Trust (NYSE:SNH)?
Insider purchases made by high-level executives is best served when the company we’re looking at has experienced transactions within the past half-year. Over the last half-year time frame, Senior Housing Properties Trust (NYSE:SNH) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Senior Housing Properties Trust (NYSE:SNH). These stocks are Camden Property Trust (NYSE:CPT), Essex Property Trust Inc (NYSE:ESS), Apartment Investment and Management Co. (NYSE:AIV), Two Harbors Investment Corp (NYSE:TWO), and American Campus Communities, Inc. (NYSE:ACC). All of these stocks are in the reit – residential industry and their market caps are closest to SNH’s market cap.