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Annaly Capital Management, Inc. (NLY): Are Hedge Funds Right About This Stock?

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Annaly Capital Management, Inc. (NYSE:NLY) shareholders have witnessed a decrease in support from the world’s most elite money managers of late.

In the eyes of most investors, hedge funds are perceived as worthless, old financial vehicles of the past. While there are over 8000 funds in operation at the moment, we choose to focus on the masters of this group, about 450 funds. Most estimates calculate that this group has its hands on the majority of the hedge fund industry’s total asset base, and by watching their highest performing investments, we have deciphered a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 (check out a sample of our picks).

Annaly Capital Management, Inc. (NYSE:NLY)Equally as important, bullish insider trading sentiment is another way to parse down the world of equities. Obviously, there are many incentives for an executive to get rid of shares of his or her company, but only one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this strategy if you understand what to do (learn more here).

Now, we’re going to take a look at the latest action surrounding Annaly Capital Management, Inc. (NYSE:NLY).

How are hedge funds trading Annaly Capital Management, Inc. (NYSE:NLY)?

Heading into Q2, a total of 23 of the hedge funds we track held long positions in this stock, a change of -8% from the first quarter. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes considerably.

Annaly Capital Management, Inc.According to our comprehensive database, Pine River Capital Management, managed by Brian Taylor, holds the largest position in Annaly Capital Management, Inc. (NYSE:NLY). Pine River Capital Management has a $65.1 million call position in the stock, comprising 1.3% of its 13F portfolio. On Pine River Capital Management’s heels is Pine River Capital Management, managed by Brian Taylor, which held a $49.6 million position; the fund has 1% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Charles Akre’s Akre Capital Management, Charles de Vaulx’s International Value Advisers and Michael Lowenstein’s Kensico Capital.

Because Annaly Capital Management, Inc. (NYSE:NLY) has experienced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedgies that decided to sell off their positions entirely last quarter. Intriguingly, Louis Bacon’s Moore Global Investments cut the biggest position of the “upper crust” of funds we track, valued at an estimated $15.1 million in stock.. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also cut its stock, about $0.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 2 funds last quarter.

How are insiders trading Annaly Capital Management, Inc. (NYSE:NLY)?

Insider purchases made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the last half-year time frame, Annaly Capital Management, Inc. (NYSE:NLY) has experienced 1 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 Annaly Capital Management, Inc. (NYSE:NLY). These stocks are National Retail Properties, Inc. (NYSE:NNN), W.P. Carey Inc. REIT (NYSE:WPC), American Tower Corp (NYSE:AMT), Public Storage (NYSE:PSA), and Vornado Realty Trust (NYSE:VNO). This group of stocks belong to the reit – diversified industry and their market caps resemble NLY’s market cap.

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