MFA Financial, Inc. (NYSE:MFA) shareholders have witnessed a decrease in activity from the world’s largest hedge funds of late.
If you’d ask most traders, hedge funds are perceived as worthless, old financial tools of years past. While there are greater than 8000 funds trading at the moment, we at Insider Monkey hone in on the bigwigs of this club, about 450 funds. It is widely believed that this group has its hands on most of the smart money’s total asset base, and by tracking their top investments, we have spotted a few investment strategies that have historically outperformed 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 began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as beneficial, bullish insider trading activity is a second way to parse down the investments you’re interested in. Just as you’d expect, there are many stimuli for an executive to drop shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the market-beating potential of this tactic if “monkeys” understand what to do (learn more here).
Now, it’s important to take a gander at the key action regarding MFA Financial, Inc. (NYSE:MFA).
Hedge fund activity in MFA Financial, Inc. (NYSE:MFA)
In preparation for this year, a total of 15 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings meaningfully.
When looking at the hedgies we track, Brian Taylor’s Pine River Capital Management had the biggest position in MFA Financial, Inc. (NYSE:MFA), worth close to $31 million, accounting for 0.6% of its total 13F portfolio. The second largest stake is held by Balestra, managed by James Melcher, which held a $30 million position; the fund has 10.4% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Carl Goldsmith and Scott Klein’s Beach Point Capital Management, David Tepper’s Appaloosa Management LP and Ken Griffin’s Citadel Investment Group.
Seeing as MFA Financial, Inc. (NYSE:MFA) has faced a declination in interest from the entirety of the hedge funds we track, it’s easy to see that there is a sect of hedge funds that slashed their full holdings heading into 2013. It’s worth mentioning that D. E. Shaw’s D E Shaw dumped the largest position of all the hedgies we track, worth about $1 million in stock.. Steven Cohen’s fund, SAC Capital Advisors, also dumped its stock, about $1 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in MFA Financial, Inc. (NYSE:MFA)
Bullish insider trading is best served when the company we’re looking at has seen transactions within the past half-year. Over the latest 180-day time period, MFA Financial, Inc. (NYSE:MFA) has seen 6 unique insiders buying, 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 MFA Financial, Inc. (NYSE:MFA). These stocks are Newcastle Investment Corp. (NYSE:NCT), Starwood Property Trust, Inc. (NYSE:STWD), Douglas Emmett, Inc. (NYSE:DEI), Retail Properties of America Inc (NYSE:RPAI), and Chimera Investment Corporation (NYSE:CIM). This group of stocks are the members of the reit – diversified industry and their market caps match MFA’s market cap.