Should You Buy Hersha Hospitality Trust (HT)?

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Hersha Hospitality Trust (NYSE:HT) was in 13 hedge funds’ portfolio at the end of the first quarter of 2013. HT shareholders have witnessed an increase in hedge fund interest recently. There were 6 hedge funds in our database with HT positions at the end of the previous quarter.

According to most shareholders, hedge funds are perceived as slow, outdated financial vehicles of yesteryear. While there are more than 8000 funds with their doors open at present, we at Insider Monkey look at the bigwigs of this club, about 450 funds. It is widely believed that this group controls most of the smart money’s total asset base, and by monitoring their top equity investments, we have found a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as integral, optimistic insider trading sentiment is another way to parse down the stock market universe. Just as you’d expect, there are a variety of stimuli for a bullish insider to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the impressive potential of this strategy if you understand where to look (learn more here).

With these “truths” under our belt, it’s important to take a glance at the key action encompassing Hersha Hospitality Trust (NYSE:HT).

How have hedgies been trading Hersha Hospitality Trust (NYSE:HT)?

At the end of the first quarter, a total of 13 of the hedge funds we track were long in this stock, a change of 117% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably.

Hersha Hospitality Trust: Institutions Believe In This Hotel REITOf the funds we track, Capital Growth Management, managed by Ken Heebner, holds the biggest position in Hersha Hospitality Trust (NYSE:HT). Capital Growth Management has a $37 million position in the stock, comprising 0.9% of its 13F portfolio. On Capital Growth Management’s heels is Long Pond Capital, managed by John Khoury, which held a $9 million position; 1.6% of its 13F portfolio is allocated to the stock. Remaining hedgies that are bullish include Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors.

As one would reasonably expect, specific money managers have jumped into Hersha Hospitality Trust (NYSE:HT) headfirst. Capital Growth Management, managed by Ken Heebner, created the most outsized position in Hersha Hospitality Trust (NYSE:HT). Capital Growth Management had 37 million invested in the company at the end of the quarter. John Khoury’s Long Pond Capital also initiated a $9 million position during the quarter. The other funds with brand new HT positions are Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors, and Malcolm Fairbairn’s Ascend Capital.

What have insiders been doing with Hersha Hospitality Trust (NYSE:HT)?

Insider buying is particularly usable when the company we’re looking at has experienced transactions within the past 180 days. Over the last half-year time period, Hersha Hospitality Trust (NYSE:HT) has experienced 1 unique insiders buying, and 6 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Hersha Hospitality Trust (NYSE:HT). These stocks are Retail Opportunity Investments Corp (NASDAQ:ROIC), Saul Centers Inc (NYSE:BFS), Inland Real Estate Corporation (NYSE:IRC), Ramco-Gershenson Properties Trust (NYSE:RPT), and Pennsylvania R.E.I.T. (NYSE:PEI). This group of stocks belong to the reit – retail industry and their market caps match HT’s market cap.

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