Two Harbors Investment Corp (NYSE:TWO) doesn't really get the respect it deserves from most mREIT-focused bloggers. This is a company that had enormous gains in 2012 and early 2013 before falling through the floor in recent months. It's interesting, though, that Two Harbors' richest investors were standing pat this past quarter, electing not to give up on the stock. Take a look at the details.
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Just as crucial, bullish insider trading sentiment is another way to look at the investments you're interested in. As the old adage goes: there are many incentives for an upper level exec to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this strategy if investors understand where to look (learn more here).
Thus, it's important to analyze the latest info about Two Harbors Investment Corp (NYSE:TWO).
At the end of the second quarter, a total of 24 of the hedge funds we track held long positions in this stock, a change of 0% from the first quarter. With the smart money's sentiment swirling, there exists an "upper tier" of key hedge fund managers who were upping their stakes significantly.
According to our 13F database, Brigade Capital, managed by Don Morgan, holds the most valuable position in Two Harbors Investment Corp (NYSE:TWO). Brigade Capital has a $23.8 million position in the stock, comprising 0.8% of its 13F portfolio. Sitting at the No. 2 spot is Long Pond Capital, managed by John Khoury, which held a $7.2 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Ken Griffin's Citadel Investment Group, Charles Clough's Clough Capital Partners and Steven Cohen's SAC Capital Advisors.
As Two Harbors Investment Corp (NYSE:TWO) has experienced declining interest from the entirety of the hedge funds we track, it's safe to say that there exists a select few funds who sold off their positions entirely in Q1. Intriguingly, Brian Jackelow's SAB Capital Management sold off the biggest position of the "upper crust" of funds we monitor, totaling close to $152.9 million in stock. Bain Capital's fund, Brookside Capital, also dumped its stock, about $88.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Bullish insider trading is most useful when the company in question has seen transactions within the past 180 days. Over the latest half-year time frame, Two Harbors Investment Corp (NYSE:TWO) has experienced 5 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll also take a look at the relationship between both of these indicators in other stocks similar to Two Harbors Investment Corp (NYSE:TWO). These stocks are Essex Property Trust Inc (NYSE:ESS), BRE Properties Inc (NYSE:BRE), Senior Housing Properties Trust (NYSE:SNH), American Campus Communities, Inc. (NYSE:ACC), and Apartment Investment and Management Co. (NYSE:AIV). This group of stocks belong to the reit - residential industry and their market caps resemble TWO's market cap.