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Hedge Funds Aren’t Crazy About American Capital Agency Corp. (NASDAQ:AGNC) Anymore

American Capital Agency Corp. (NASDAQ:AGNC) was in 23 hedge funds’ portfolio at the end of the fourth quarter of 2012. AGNC has experienced a decrease in hedge fund interest recently. There were 27 hedge funds in our database with AGNC positions at the end of the previous quarter.

American Capital Agency Corp. (NASDAQ:AGNC)

If you’d ask most stock holders, hedge funds are perceived as underperforming, old investment vehicles of yesteryear. While there are over 8000 funds with their doors open at present, we hone in on the moguls of this club, about 450 funds. It is widely believed that this group controls the majority of the smart money’s total capital, and by watching their top investments, we have brought to light a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outstripped 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Just as important, positive insider trading activity is another way to parse down the investments you’re interested in. Just as you’d expect, there are a number of motivations for an executive to sell shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this strategy if you know what to do (learn more here).

With all of this in mind, we’re going to take a peek at the latest action surrounding American Capital Agency Corp. (NASDAQ:AGNC).

What have hedge funds been doing with American Capital Agency Corp. (NASDAQ:AGNC)?

At the end of the fourth quarter, a total of 23 of the hedge funds we track were bullish in this stock, a change of -15% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings considerably.

When looking at the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the biggest position in American Capital Agency Corp. (NASDAQ:AGNC). Renaissance Technologies has a $100 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $51 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include Brian Taylor’s Pine River Capital Management, Louis Bacon’s Moore Global Investments and Phill Gross and Robert Atchinson’s Adage Capital Management.

Seeing as American Capital Agency Corp. (NASDAQ:AGNC) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there were a few money managers who sold off their entire stakes last quarter. At the top of the heap, Paul Singer’s Elliott Management sold off the biggest position of the “upper crust” of funds we key on, comprising an estimated $35 million in stock.. Charles Clough’s fund, Clough Capital Partners, also dropped its stock, about $23 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 4 funds last quarter.

Insider trading activity in American Capital Agency Corp. (NASDAQ:AGNC)

Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has seen transactions within the past half-year. Over the latest 180-day time period, American Capital Agency Corp. (NASDAQ:AGNC) has experienced 2 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

With the returns exhibited by the aforementioned research, everyday investors should always pay attention to hedge fund and insider trading activity, and American Capital Agency Corp. (NASDAQ:AGNC) is no exception.

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

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