Is CYS Investments Inc (NYSE:CYS) worth your attention right now? The smart money is taking a bearish view. The number of bullish hedge fund positions retreated by 2 lately.
In the eyes of most shareholders, hedge funds are assumed to be worthless, outdated investment tools of yesteryear. While there are greater than 8000 funds with their doors open at the moment, we hone in on the top tier of this group, close to 450 funds. It is widely believed that this group oversees the lion’s share of the smart money’s total capital, and by tracking their top stock picks, we have uncovered a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as important, positive insider trading sentiment is a second way to break down the investments you’re interested in. There are plenty of stimuli for an upper level exec to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this strategy if piggybackers understand what to do (learn more here).
With all of this in mind, we’re going to take a gander at the latest action surrounding CYS Investments Inc (NYSE:CYS).
What have hedge funds been doing with CYS Investments Inc (NYSE:CYS)?
In preparation for this quarter, a total of 13 of the hedge funds we track were bullish in this stock, a change of -13% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully.
When looking at the hedgies we track, Pine River Capital Management, managed by Brian Taylor, holds the biggest position in CYS Investments Inc (NYSE:CYS). Pine River Capital Management has a $143.7 million position in the stock, comprising 2.9% of its 13F portfolio. Sitting at the No. 2 spot is Amy Minella of Cardinal Capital, with a $59.4 million position; the fund has 3.7% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Ken Griffin’s Citadel Investment Group, James Melcher’s Balestra and Anand Parekh’s Alyeska Investment Group.
Since CYS Investments Inc (NYSE:CYS) has witnessed bearish sentiment from hedge fund managers, it’s safe to say that there exists a select few hedgies that elected to cut their positions entirely in Q1. It’s worth mentioning that Bain Capital’s Brookside Capital cut the largest stake of the 450+ funds we watch, totaling an estimated $47.5 million in stock., and Malcolm Fairbairn of Ascend Capital was right behind this move, as the fund cut about $5.4 million worth. These transactions are important to note, as total hedge fund interest was cut by 2 funds in Q1.
Insider trading activity in CYS Investments Inc (NYSE:CYS)
Insider buying is best served when the company we’re looking at has experienced transactions within the past six months. Over the latest six-month time period, CYS Investments Inc (NYSE:CYS) has seen 2 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to CYS Investments Inc (NYSE:CYS). These stocks are Hatteras Financial Corp. (NYSE:HTS), Post Properties Inc (NYSE:PPS), ARMOUR Residential REIT, Inc. (NYSE:ARR), Sun Communities Inc (NYSE:SUI), and Colonial Properties Trust Inc (NYSE:CLP). This group of stocks belong to the reit – residential industry and their market caps match CYS’s market cap.