5 High Dividend Stocks That Hedge Funds Are Fleeing

Although there is no conclusive evidence that a rise in interest rates negatively affects dividend stocks as a whole, research in the past has shown that dividend stocks which don’t exhibit any significant growth and return most of their income to shareholders are hit the hardest when rates are hiked. This is also the reason why smart money starts flowing out of such stocks when an interest rate hike is imminent. Since stocks with high dividend yields attract a lot of retail investors, to protect our readers from a possible downswing, we at Insider Monkey decided to analyze the latest 13F portfolio data submitted by the funds we track and figure out the top high dividend stocks which smart money was fleeing from during the second quarter. Read further to know which high dividend stocks may be ones to get out of.

Why are we interested in the 13F filings of a select group of hedge funds? We use these filings to determine the top 15 small-cap stocks held by these elite funds based on 16 years of research that showed their top small-cap picks are much more profitable than both their large-cap stocks and the broader market as a whole; yet investors have been stuck (until now) investing in all of a hedge fund’s stocks: the good, the bad, and the ugly. Why pay fees to invest in both the best and worst ideas of a particular hedge fund when you can simply mimic the best ideas of the best fund managers on your own? These top small-cap stocks beat the S&P 500 Total Return Index by an average of nearly one percentage point per month in our backtests, which were conducted over the period of 1999 to 2012. Even better, since the beginning of forward testing at the end of August 2012, the strategy worked just as our research predicted and then some, outperforming the market every year and returning 118% over the last 36 months, which is more than 60 percentage points higher than the returns of the S&P 500 ETF (SPY): Spirit Realty Capital, Inc (New) (NYSE:SRC), Northstar Realty Finance Corp (NYSE:NRF), Denbury Resources Inc. (NYSE:DNR), DHT Holdings Inc (NYSE:DHT) and Blackstone Group LP (NYSE:BX).

Source: Insider Monkey

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