Hedge Funds Are Dumping Ellington Financial LLC (EFC)

Seeing as Ellington Financial LLC (NYSE:EFC) has experienced a declining sentiment from the smart money, it’s easy to see that there lies a certain “tier” of hedge funds who sold off their positions entirely by the end of the third quarter. It’s worth mentioning that Renaissance Technologies dropped the largest position of the 700 funds tracked by Insider Monkey, comprising about $2.1 million in stock, and William Michaelcheck’s Mariner Investment Group was right behind this move, as the fund dropped about $2 million worth of shares. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 1 fund by the end of the third quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Ellington Financial LLC (NYSE:EFC) but similarly valued. We will take a look at Capella Education Company (NASDAQ:CPLA), Aegion Corp – Class A (NASDAQ:AEGN), PGT, Inc. (NASDAQ:PGTI), and Synergy Pharmaceuticals Inc (NASDAQ:SGYP). This group of stocks’ market values is closest to Ellington Financial LLC (NYSE:EFC)’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CPLA 13 123788 -2
AEGN 15 38415 2
PGTI 11 82952 -7
SGYP 31 134639 0

As you can see, these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $95 million. That figure was $57 million in Ellington Financial LLC (NYSE:EFC)’s case. Synergy Pharmaceuticals Inc (NASDAQ:SGYP) is the most popular stock in this table. On the other hand, PGT, Inc. (NASDAQ:PGTI) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks, Ellington Financial LLC (NYSE:EFC) is even less popular than PGT, Inc. (NASDAQ:PGTI). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.