Walter Investment Management Corp (NYSE:WAC): Insiders Are Dumping, Should You?

Walter Investment Management Corp (NYSE:WAC) has seen an increase in support from the world’s most elite money managers lately.

In the 21st century investor’s toolkit, there are many gauges shareholders can use to track the equity markets. Some of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite hedge fund managers can trounce the broader indices by a significant margin (see just how much).

Walter Investment Management Corp (NYSE:WAC)

Just as beneficial, optimistic insider trading sentiment is another way to break down the stock market universe. Just as you’d expect, there are a number of reasons for an executive to sell shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this strategy if “monkeys” understand what to do (learn more here).

With all of this in mind, let’s take a peek at the key action surrounding Walter Investment Management Corp (NYSE:WAC).

How have hedgies been trading Walter Investment Management Corp (NYSE:WAC)?

At year’s end, a total of 21 of the hedge funds we track held long positions in this stock, a change of 40% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes considerably.

When looking at the hedgies we track, Steven Cohen’s SAC Capital Advisors had the most valuable position in Walter Investment Management Corp (NYSE:WAC), worth close to $76 million, comprising 0.4% of its total 13F portfolio. Coming in second is Alydar Capital, managed by John Murphy, which held a $55 million position; the fund has 4.3% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Brian Taylor’s Pine River Capital Management, Paul Ruddockáand Steve Heinz’s Lansdowne Partners and Richard Driehaus’s Driehaus Capital.

As aggregate interest increased, key hedge funds were breaking ground themselves. Lansdowne Partners, managed by Paul Ruddockáand Steve Heinz, established the biggest position in Walter Investment Management Corp (NYSE:WAC). Lansdowne Partners had 28 million invested in the company at the end of the quarter. Brian Jackelow’s SAB Capital Management also initiated a $11 million position during the quarter. The other funds with new positions in the stock are Robert Pohly’s Samlyn Capital, Don Morgan’s Brigade Capital, and Louis Bacon’s Moore Global Investments.

What have insiders been doing with Walter Investment Management Corp (NYSE:WAC)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time period, Walter Investment Management Corp (NYSE:WAC) has seen zero unique insiders buying, and 7 insider sales (see the details of insider trades here).

With the results demonstrated by the aforementioned time-tested strategies, retail investors must always pay attention to hedge fund and insider trading sentiment, and Walter Investment Management Corp (NYSE:WAC) is an important part of this process.

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

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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