Do Hedge Funds Love Western Asset Mortgage Capital Corp (WMC)?

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As aggregate interest increased, key hedge funds were leading the bulls’ herd. Ellington assembled the most valuable position in Western Asset Mortgage Capital Corp (NYSE:WMC). Ellington had $0.2 million invested in the company at the end of the quarter. Two Sigma Advisors also made a $0.1 million investment in the stock during the quarter. The only other fund with a new position in the stock is  PEAK6 Capital Management.

Let’s now review hedge fund activity in other stocks similar to Western Asset Mortgage Capital Corp (NYSE:WMC). We will take a look at Monarch Casino & Resort, Inc. (NASDAQ:MCRI), NewLink Genetics Corp (NASDAQ:NLNK), Winmark Corporation (NASDAQ:WINA), and La Jolla Pharmaceutical Company (NASDAQ:LJPC). This group of stocks’ market caps are similar to WMC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MCRI 10 46957 -4
NLNK 12 52368 -1
WINA 3 62096 0
LJPC 10 156944 1

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $80 million. That figure was $6 million in WMC’s case. NewLink Genetics Corp (NASDAQ:NLNK) is the most popular stock in this table. On the other hand Winmark Corporation (NASDAQ:WINA) is the least popular one with only 3 bullish hedge fund positions. Western Asset Mortgage Capital Corp (NYSE:WMC) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NLNK might be a better candidate to consider taking a long position in.

Disclosure: None

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