Capstead Mortgage Corporation (NYSE:CMO) has seen a decrease in support from the world’s most elite money managers in recent months.
At the moment, there are a multitude of methods investors can use to analyze stocks. Two of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top money managers can trounce their index-focused peers by a very impressive margin (see just how much).
Just as important, optimistic insider trading sentiment is another way to break down the financial markets. There are lots of incentives for an upper level exec to cut shares of his or her company, but just one, very simple reason why they would buy. Many academic studies have demonstrated the impressive potential of this strategy if “monkeys” understand what to do (learn more here).
Consequently, it’s important to take a look at the key action surrounding Capstead Mortgage Corporation (NYSE:CMO).
What does the smart money think about Capstead Mortgage Corporation (NYSE:CMO)?
At year’s end, a total of 11 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings considerably.
According to our comprehensive database, Renaissance Technologies, managed by Jim Simons, holds the biggest position in Capstead Mortgage Corporation (NYSE:CMO). Renaissance Technologies has a $9 million position in the stock, comprising 0% of its 13F portfolio. Sitting at the No. 2 spot is Soros Fund Management, managed by George Soros, which held a $8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Ken Griffin’s Citadel Investment Group, David Costen Haley’s HBK Investments and Cliff Asness’s AQR Capital Management.
Seeing as Capstead Mortgage Corporation (NYSE:CMO) has witnessed declining sentiment from hedge fund managers, it’s easy to see that there exists a select few money managers that decided to sell off their positions entirely in Q4. It’s worth mentioning that Charles Clough’s Clough Capital Partners dumped the largest position of all the hedgies we watch, comprising an estimated $27 million in stock., and Dmitry Balyasny of Balyasny Asset Management was right behind this move, as the fund dumped about $1 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Capstead Mortgage Corporation (NYSE:CMO)?
Bullish insider trading is most useful when the primary stock in question has experienced transactions within the past half-year. Over the last half-year time period, Capstead Mortgage Corporation (NYSE:CMO) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Capstead Mortgage Corporation (NYSE:CMO). These stocks are American Capital Mortgage Investment Crp (NASDAQ:MTGE), Crexus Investment Corp (NYSE:CXS), Colony Financial Inc (NYSE:CLNY), Cousins Properties Inc (NYSE:CUZ), and Investors Real Estate Trust (NYSE:IRET). This group of stocks belong to the reit – diversified industry and their market caps are closest to CMO’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|American Capital Mortgage Investment Crp (NASDAQ:MTGE)||12||5||0|
|Crexus Investment Corp (NYSE:CXS)||17||0||0|
|Colony Financial Inc (NYSE:CLNY)||16||0||6|
|Cousins Properties Inc (NYSE:CUZ)||10||0||2|
|Investors Real Estate Trust (NYSE:IRET)||5||7||0|
With the results demonstrated by our strategies, everyday investors must always keep an eye on hedge fund and insider trading activity, and Capstead Mortgage Corporation (NYSE:CMO) is an important part of this process.