Should You Avoid W.P. Carey Inc. REIT (WPC)?

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W.P. Carey Inc. REIT (NYSE:WPC) was in 11 hedge funds’ portfolio at the end of the first quarter of 2013. WPC investors should be aware of a decrease in enthusiasm from smart money lately. There were 15 hedge funds in our database with WPC holdings at the end of the previous quarter.

W.P. Carey Inc. REIT (NYSE:WPC)

To the average investor, there are many methods shareholders can use to monitor Mr. Market. A couple of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top fund managers can outpace the market by a solid amount (see just how much).

Just as key, bullish insider trading activity is a second way to break down the marketplace. Just as you’d expect, there are a variety of reasons for an insider to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if shareholders know what to do (learn more here).

Now, we’re going to take a glance at the latest action surrounding W.P. Carey Inc. REIT (NYSE:WPC).

How have hedgies been trading W.P. Carey Inc. REIT (NYSE:WPC)?

At Q1’s end, a total of 11 of the hedge funds we track were bullish in this stock, a change of -27% from the first quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully.

Of the funds we track, Paulson & Co, managed by John Paulson, holds the biggest position in W.P. Carey Inc. REIT (NYSE:WPC). Paulson & Co has a $108 million position in the stock, comprising 0.6% of its 13F portfolio. Sitting at the No. 2 spot is Tom Gayner of Markel Gayner Asset Management, with a $64.3 million position; 2.4% of its 13F portfolio is allocated to the company. Some other peers that are bullish include Eric Edidin and Josh Lobel’s Archer Capital Management, Chuck Royce’s Royce & Associates and Scott Scher & Michael Prober’s Clovis Capital Management.

Due to the fact that W.P. Carey Inc. REIT (NYSE:WPC) has witnessed falling interest from the aggregate hedge fund industry, it’s easy to see that there were a few fund managers that slashed their entire stakes in Q1. Interestingly, J. Alan Reid Jr.’s Forward Management sold off the largest investment of all the hedgies we monitor, comprising close to $15.6 million in stock., and Peter S. Park of Park West Asset Management was right behind this move, as the fund cut about $10.6 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 4 funds in Q1.

Insider trading activity in W.P. Carey Inc. REIT (NYSE:WPC)

Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the latest six-month time period, W.P. Carey Inc. REIT (NYSE:WPC) has seen 1 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to W.P. Carey Inc. REIT (NYSE:WPC). These stocks are MFA Financial, Inc. (NYSE:MFA), Retail Properties of America Inc (NYSE:RPAI), Douglas Emmett, Inc. (NYSE:DEI), Starwood Property Trust, Inc. (NYSE:STWD), and National Retail Properties, Inc. (NYSE:NNN). This group of stocks belong to the reit – diversified industry and their market caps are similar to WPC’s market cap.

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