Hedge Funds Are Selling Invesco Mortgage Capital Inc (IVR)

Is it smart to be bullish on Invesco Mortgage Capital Inc (NYSE:IVR)?

In the 21st century investor’s toolkit, there are a multitude of metrics investors can use to watch the equity markets. 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 best investment managers can beat the market by a significant margin (see just how much).

Equally as useful, positive insider trading activity is a second way to look at the stock market universe. Just as you’d expect, there are lots of stimuli for a corporate insider to drop shares of his or her company, but only one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this strategy if “monkeys” understand what to do (learn more here).

What’s more, it’s important to analyze the latest info surrounding Invesco Mortgage Capital Inc (NYSE:IVR).

Hedge fund activity in Invesco Mortgage Capital Inc (NYSE:IVR)

At the end of the second quarter, a total of 13 of the hedge funds we track were bullish in this stock, a change of -7% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings significantly.

According to our 13F database, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Invesco Mortgage Capital Inc (NYSE:IVR). Citadel Investment Group has a $51.3 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Matthew Hulsizer of PEAK6 Capital Management, with a $10.8 million call position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds that hold long positions include Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies and Nathaniel August’s Mangrove Partners.

Since Invesco Mortgage Capital Inc (NYSE:IVR) has witnessed bearish sentiment from the top-tier hedge fund industry, logic holds that there was a specific group of hedgies who sold off their entire stakes at the end of the second quarter. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors said goodbye to the biggest position of all the hedgies we track, comprising an estimated $3.1 million in stock. Richard Driehaus’s fund, Driehaus Capital, also sold off its stock, about $2.2 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 1 funds at the end of the second quarter.

What do corporate executives and insiders think about Invesco Mortgage Capital Inc (NYSE:IVR)?

Insider buying made by high-level executives is particularly usable when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time period, Invesco Mortgage Capital Inc (NYSE:IVR) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators in other stocks similar to Invesco Mortgage Capital Inc (NYSE:IVR). 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 Nationstar Mortgage Holdings Inc (NYSE:NSM). This group of stocks are in the mortgage investment industry and their market caps are similar to IVR’s market cap.