Walter Investment Management Corp (WAC): Are Hedge Funds Right About This Stock?

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As aggregate interest increased, key money managers have jumped into Walter Investment Management Corp (NYSE:WAC) headfirst. Arrowgrass Capital Partners established the most valuable position in Walter Investment Management Corp (NYSE:WAC). Arrowgrass Capital Partners had $3.2 million invested in the company at the end of the quarter. Centerbridge Partners also initiated a $0.5 million position during the quarter. The only other fund with a brand new WAC position is Renaissance Technologies,one of the largest hedge funds in the world.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Walter Investment Management Corp (NYSE:WAC) but similarly valued. These stocks are New York & Company, Inc. (NYSE:NWY), Radio One, Inc. (NASDAQ:ROIAK), Ocean Shore Holding Co (NASDAQ:OSHC), and Kopin Corporation (NASDAQ:KOPN). This group of stocks’ market values match WAC’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NWY 9 16281 -1
ROIAK 4 16371 -2
OSHC 3 4213 -3
KOPN 2 5352 -2

As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $84 million in WAC’s case. New York & Company, Inc. (NYSE:NWY) is the most popular stock in this table. On the other hand Kopin Corporation (NASDAQ:KOPN) is the least popular one with only 2 bullish hedge fund positions. Walter Investment Management Corp (NYSE:WAC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NWY might be a better candidate to consider taking a long position in.

Disclosure: None

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