This Metric Says You Are Smart to Sell MFA Financial, Inc. (MFA)

Page 1 of 2

Is MFA Financial, Inc. (NYSE:MFA) a good investment?

If you were to ask many investors, hedge funds are seen as delayed, outdated financial vehicles of a period lost to current times. Although there are more than 8,000 hedge funds trading currently, this site focuses on the bigwigs of this group, around 525 funds. It is widely held that this group has its hands on the majority of the hedge fund industry’s total capital, and by watching their best investments, we’ve revealed a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 trumped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Just as key, optimistic insider trading activity is a second way to look at the world of equities. Just as you’d expect, there are a number of incentives for a corporate insider to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the valuable potential of this strategy if piggybackers understand what to do (learn more here).

MFA Financial, Inc.

Furthermore, let’s examine the latest info for MFA Financial, Inc. (NYSE:MFA).

Hedge fund activity in MFA Financial, Inc. (NYSE:MFA)

At Q2′s end, a total of 18 of the hedge funds we track were long in this stock, a change of -14% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings meaningfully.

According to our 13F database, Beach Point Capital Management, managed by Carl Goldsmith and Scott Klein, holds the biggest position in MFA Financial, Inc. (NYSE:MFA). Beach Point Capital Management has a $19.2 million position in the stock, comprising 7.2% of its 13F portfolio. Coming in second is Millennium Management, managed by Israel Englander, which held a $16.7 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Frank Brosens’s Taconic Capital, Jim Simons’s Renaissance Technologies and Chuck Royce’s Royce & Associates.

Since MFA Financial, Inc. (NYSE:MFA) has witnessed bearish sentiment from upper-tier hedge fund managers, logic holds that there lies a certain “tier” of fund managers who sold off their positions entirely last quarter. At the top of the heap, James Melcher’s Balestra said goodbye to the biggest position of the “upper crust” of funds we monitor, comprising about $16.8 million in stock. David Tepper’s fund, Appaloosa Management LP, also dropped its stock, about $8.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 3 funds last quarter.

What have insiders been doing with MFA Financial, Inc. (NYSE:MFA)?

Insider buying made by high-level executives is particularly usable when the company we’re looking at has experienced transactions within the past half-year. Over the last 180-day time frame, MFA Financial, Inc. (NYSE:MFA) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators 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 belong to the reit – diversified industry and their market caps are closest to MFA’s market cap.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!