Elite Hedge Fund Betting on Apple Inc. (AAPL), American International Group Inc (AIG) & ‘Income at a Reasonable Price’

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Shares currently trade at a 42% discount to book value parity, and over the shorter term, the Street predicts an upside of nearly 11% from current levels. There’s not much here to dislike about AIG, and hedge funds’ conviction should be taken seriously.

Two Harbors Investment Corp (NYSE:TWO) rounds out this trio, as it has for three consecutive quarters. A new position for Jackelow back in Q3 2011, the residential-focused REIT lies 18th of 144 when we rank this industry by hedge fund interest. Coincidentally, 18 of the hedgies we track were bullish on Two Harbors at the end of Q4, including Steven Cohen, David Tepper and George Soros, but it’s worth noting that Jackelow’s $90 million position was the largest, trumping his next closest peer by a factor of 2 to 1.

Now, to call Jackelow the poster boy for Two Harbors would be a stretch, but it’s an important point to make that shares have risen by more than 40% since the start of 2012, rewarding the hedge fund manager’s investment quite nicely. Despite its solid appreciation, this REIT still sports a price-to-book valuation of 1.12, which is a 44% discount to industry norms. A projected dividend yield above 17% is also tops in the entire REIT space, in terms of both residential and diversified operators.

In short, it looks like Two Harbors is quite the “Income at a Reasonable Price” play. Yes, the term doesn’t get thrown around much–if ever–but with the dividend and value that this REIT provides, we may have to start.

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