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Hedge Funds Are Betting On PennyMac Mortgage Investment Trust (NYSE:PMT)

PennyMac Mortgage Investment Trust (NYSE:PMT) was in 21 hedge funds’ portfolio at the end of December. PMT investors should pay attention to an increase in hedge fund sentiment in recent months. There were 16 hedge funds in our database with PMT positions at the end of the previous quarter.

To most market participants, hedge funds are perceived as slow, outdated investment vehicles of yesteryear. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey hone in on the crème de la crème of this club, close to 450 funds. It is estimated that this group oversees most of the smart money’s total capital, and by keeping an eye on their best stock picks, we have determined a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 25 percentage points in 6.5 month (see the details here).

PennyMac Mortgage Investment Trust (NYSE:PMT)Just as key, bullish insider trading sentiment is another way to parse down the stock market universe. There are lots of stimuli for an upper level exec to cut shares of his or her company, but only one, very obvious reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this method if shareholders know what to do (learn more here).

Consequently, we’re going to take a glance at the latest action encompassing PennyMac Mortgage Investment Trust (NYSE:PMT).

What does the smart money think about PennyMac Mortgage Investment Trust (NYSE:PMT)?

At the end of the fourth quarter, a total of 21 of the hedge funds we track were long in this stock, a change of 31% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings significantly.

Of the funds we track, Highbridge Capital Management, managed by Glenn Russell Dubin, holds the biggest position in PennyMac Mortgage Investment Trust (NYSE:PMT). Highbridge Capital Management has a $90 million position in the stock, comprising 1.4% of its 13F portfolio. Sitting at the No. 2 spot is John Burbank of Passport Capital, with a $39 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Anand Parekh’s Alyeska Investment Group, Israel Englander’s Millennium Management and Chuck Royce’s Royce & Associates.

With a general bullishness amongst the heavyweights, key hedge funds have jumped into PennyMac Mortgage Investment Trust (NYSE:PMT) headfirst. Highbridge Capital Management, managed by Glenn Russell Dubin, initiated the largest position in PennyMac Mortgage Investment Trust (NYSE:PMT). Highbridge Capital Management had 90 million invested in the company at the end of the quarter. John Burbank’s Passport Capital also made a $39 million investment in the stock during the quarter. The following funds were also among the new PMT investors: Dmitry Balyasny’s Balyasny Asset Management, Louis Bacon’s Moore Global Investments, and Paul Ruddockáand Steve Heinz’s Lansdowne Partners.

How have insiders been trading PennyMac Mortgage Investment Trust (NYSE:PMT)?

Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past six months. Over the latest 180-day time period, PennyMac Mortgage Investment Trust (NYSE:PMT) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

With the returns shown by Insider Monkey’s time-tested strategies, everyday investors should always monitor hedge fund and insider trading sentiment, and PennyMac Mortgage Investment Trust (NYSE:PMT) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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