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Is Capstead Mortgage Corporation (CMO) A Good Stock To Buy?

Because Capstead Mortgage Corporation (NYSE:CMO) has faced a decline in interest from the smart money, logic holds that there was a specific group of fund managers that elected to cut their full holdings heading into Q4. At the top of the heap, Matthew Hulsizer’s PEAK6 Capital Management dropped the biggest stake of all the hedgies followed by Insider Monkey, comprising about $0.4 million in call options. D E Shaw, also dropped its stock, about $0.4 million worth.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Capstead Mortgage Corporation (NYSE:CMO) but similarly valued. We will take a look at Nordic American Tanker Ltd (NYSE:NAT), Monotype Imaging Holdings Inc. (NASDAQ:TYPE), Associated Capital Group Inc (NYSE:AC), and Biglari Holdings Inc (NYSE:BH). All of these stocks’ market caps match CMO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NAT 13 67747 0
TYPE 20 95672 3
AC 4 25656 1
BH 5 40413 -1

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $57 million. That figure was $36 million in CMO’s case. Monotype Imaging Holdings Inc. (NASDAQ:TYPE) is the most popular stock in this table. On the other hand Associated Capital Group Inc (NYSE:AC) is the least popular one with only 4 bullish hedge fund positions. Capstead Mortgage Corporation (NYSE:CMO) 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 TYPE might be a better candidate to consider taking a long position in.

Disclosure: None