Nationstar Mortgage Holdings Inc (NYSE:NSM) has experienced a decrease in enthusiasm from smart money in recent months.
At the moment, there are dozens of indicators investors can use to watch stocks. Two of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top investment managers can outperform the broader indices by a solid amount (see just how much).
Just as integral, positive insider trading sentiment is a second way to parse down the stock market universe. As the old adage goes: there are many incentives for an executive to downsize 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 tactic if piggybackers understand what to do (learn more here).
With these “truths” under our belt, let’s take a peek at the key action encompassing Nationstar Mortgage Holdings Inc (NYSE:NSM).
Hedge fund activity in Nationstar Mortgage Holdings Inc (NYSE:NSM)
At Q1’s end, a total of 21 of the hedge funds we track were bullish in this stock, a change of -16% from the first quarter. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, Fortress Investment Group, managed by Michael Novogratz, holds the most valuable position in Nationstar Mortgage Holdings Inc (NYSE:NSM). Fortress Investment Group has a $2.5036 billion position in the stock, comprising 43% of its 13F portfolio. The second largest stake is held by Bruce J. Richards and Louis Hanover of Marathon Asset Management, with a $75.6 million call position; the fund has 4.7% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include John Osterweis’s Osterweis Capital Management, Kyle Bass’s Hayman Advisors and Malcolm Fairbairn’s Ascend Capital.
Due to the fact that Nationstar Mortgage Holdings Inc (NYSE:NSM) has faced a declination in interest from the aggregate hedge fund industry, we can see that there is a sect of funds that elected to cut their entire stakes heading into Q2. Interestingly, Israel Englander’s Millennium Management dumped the biggest position of all the hedgies we monitor, valued at an estimated $24.8 million in call options. Don Morgan’s fund, Brigade Capital, also dumped its stock, about $9.3 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 4 funds heading into Q2.
What do corporate executives and insiders think about Nationstar Mortgage Holdings Inc (NYSE:NSM)?
Insider buying is best served when the primary stock in question has seen transactions within the past half-year. Over the last 180-day time period, Nationstar Mortgage Holdings Inc (NYSE:NSM) has seen 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Nationstar Mortgage Holdings Inc (NYSE:NSM). These stocks are Home Loan Servicing Solutions Ltd (NASDAQ:HLSS), Walter Investment Management Corp (NYSE:WAC), Altisource Portfolio Solutions S.A. (NASDAQ:ASPS), KKR Financial Holdings LLC (NYSE:KFN), and Invesco Mortgage Capital Inc (NYSE:IVR). This group of stocks are in the mortgage investment industry and their market caps match NSM’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Home Loan Servicing Solutions Ltd (NASDAQ:HLSS) | 16 | 5 | 0 |
| Walter Investment Management Corp (NYSE:WAC) | 20 | 0 | 8 |
| Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) | 16 | 2 | 0 |
| KKR Financial Holdings LLC (NYSE:KFN) | 18 | 2 | 3 |
| Invesco Mortgage Capital Inc (NYSE:IVR) | 14 | 1 | 0 |
With the returns exhibited by Insider Monkey’s strategies, retail investors should always monitor hedge fund and insider trading sentiment, and Nationstar Mortgage Holdings Inc (NYSE:NSM) is an important part of this process.
