Western Asset Mortgage Capital CEO: Recently, L Galvin James, President and CEO at Western Asset Mortgage Capital Corp (NYSE:WMC), acquired 1,000 shares from the company at $15.807 each. After spending $15,807 on stock, his holdings bulk up to 19,350 shares, valued at $304,182.
Western Asset Mortgage Capital is a residential real estate finance company that engages in financing and managing primarily residential mortgage-backed securities in the U.S. “WMC's investment strategy focuses primarily on Agency RMBS; but it also invests in non-Agency RMBS, CMBS, ABS, and other asset-backed securities” (SeekingAlpha).
James started a position in WMC in May 2012, when it went public, having purchased more than 19,000 shares in about 17 months. P Stephen Fulton, Chief Investment Officer at WMC, started his position around the same time as James. He now holds an even larger stake: 88,000 shares, valued at $1,383,360.
But, what is leading these insiders to acquire the company’s stock? Given the fact that no relevant news have transcended, is there something that they know but we still don’t?
Trading at 0.9 times its book values, half the industry average, while boasting operating and net margins of 92.7% (more than double its peer average), this stock looks quite attractive. However, what makes it really alluring is its huge dividend yield. Paying out 22.87% of the current stock price in the form of dividends, this looks like a stock not to miss out on, especially being one of the very few mortgage REITs to have maintained its dividend yield recently.
Several hedge funds seem to acknowledge this, and have invested in the firm. The largest “hedgie” Western Asset Mortgage Capital bulls are Daniel S. Och's Oz Management and Nathaniel August's Mangrove Partners, which hold $6,008,000 and $3,705,000 (approx.) in stock, respectively.
Disclosure: Javier Hasse holds no position in any stocks mentioned