Is AG Mortgage Investment Trust Inc (MITT) Going to Burn Investors?

We view hedge fund activity in the stock as unfavorable, but in this case there was only a single hedge fund selling its entire position: Renaissance Technologies. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was D E Shaw).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as AG Mortgage Investment Trust Inc (NYSE:MITT) but similarly valued. These stocks are Omeros Corporation (NASDAQ:OMER), Heritage Insurance Holdings Inc (NYSE:HRTG), Gladstone Commercial Corporation (NASDAQ:GOOD), and Mercantile Bank Corp. (NASDAQ:MBWM). This group of stocks’ market caps are similar to MITT’s market cap.

As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $30 million. That figure was $11 million in MITT’s case. Heritage Insurance Holdings Inc (NYSE:HRTG) is the most popular stock in this table. On the other hand Omeros Corporation (NASDAQ:OMER) is the least popular one with only 3 bullish hedge fund positions. AG Mortgage Investment Trust Inc (NYSE:MITT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard HRTG might be a better candidate to consider taking a long position in.

Disclosure: None