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American Capital Agency Corp. (AGNC): Are Hedge Funds Right About This Stock?

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The market has been volatile as the Federal Reserve winds down its easy money policies. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25th and the end of October. SEC filings and hedge fund investor letters indicate that the smart money seems to be paring back their overall long exposure, and the funds’ movements is one of the reasons why the major indexes have retraced. In this article, we analyze what the smart money thinks of American Capital Agency Corp. (NASDAQ:AGNC) and find out how it is affected by hedge funds’ moves.

American Capital Agency Corp. (NASDAQ:AGNC) investors should be aware of an increase in enthusiasm from smart money lately. AGNC was in 26 hedge funds’ portfolios at the end of September. There were 19 hedge funds in our database with AGNC positions at the end of the previous quarter. At the end of this article we will also compare AGNC to other stocks including Centene Corp (NYSE:CNC), Jones Lang LaSalle Inc (NYSE:JLL), and Omega Healthcare Investors Inc (NYSE:OHI) to get a better sense of its popularity.

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If you’d ask most traders, hedge funds are viewed as slow, outdated financial vehicles of years past. While there are greater than 8000 funds in operation at the moment, Our experts choose to focus on the aristocrats of this club, around 700 funds. These money managers handle the lion’s share of the hedge fund industry’s total capital, and by shadowing their top picks, Insider Monkey has discovered various investment strategies that have historically exceeded the broader indices. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Now, we’re going to view the new action encompassing American Capital Agency Corp. (NASDAQ:AGNC).

Hedge fund activity in American Capital Agency Corp. (NASDAQ:AGNC)

At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 37% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Stephen Feinberg’s Cerberus Capital Management has the most valuable position in American Capital Agency Corp. (NASDAQ:AGNC), worth close to $139.6 million, corresponding to 11.6% of its total 13F portfolio. The second most bullish fund manager is Whitebox Advisors, led by Andy Redleaf, holding a $72.9 million position; the fund has 3.3% of its 13F portfolio invested in the stock. Some other peers with similar optimism contain Charles de Vaulx’s International Value Advisers, and Brian Taylor’s Pine River Capital Management.

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