Should You Avoid Nationstar Mortgage Holdings Inc (NSM)?

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that sold off their entire stakes in the stock during the third quarter. It’s worth mentioning that Don Morgan’s Brigade Capital sold off the biggest stake of all the investors monitored by Insider Monkey, comprising about $10.7 million in call options, and Andy Redleaf’s Whitebox Advisors was right behind this move, as the fund sold off about $6.1 million worth of shares.

Let’s also examine hedge fund activity in other stocks similar to Nationstar Mortgage Holdings Inc (NYSE:NSM). We will take a look at BlackRock Credit All Inc Trust IV (NYSE:BTZ), DineEquity Inc (NYSE:DIN), Mantech International Corp (NASDAQ:MANT), and Silver Standard Resources Inc. (USA) (NASDAQ:SSRI). This group of stocks’ market caps are similar to NSM’s market cap.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $62 million. That figure was $212 million in NSM’s case. DineEquity Inc (NYSE:DIN) is the most popular stock in this table. On the other hand BlackRock Credit All Inc Trust IV (NYSE:BTZ) is the least popular one with only 3 bullish hedge fund positions. Nationstar Mortgage Holdings Inc (NYSE:NSM) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard DIN might be a better candidate to consider taking a long position in.

Disclosure: None