5 Finance-Related Stocks Hedge Funds Dumped Like Crazy in Q3

MGIC Investment Corp.(NYSE:MTG) was another financial stock that saw huge selling by hedge fund investors during the third quarter. As per our records, ten hedge funds exited the stock during the June-Sepetember period. Other than insurance, this private mortgage insurer also provides a number of services to the mortgage industry such as loan origination and portfolios, and mortgage lead generation. John Paulson was the biggest seller of this stock during the third quarter, selling 114.5 million shares. Other hedge funds which sold off all their positions in the stock were CNH Partners and GLG Partners. Janus Capital also substantially reduced its stake by selling 2.69 million shares, while Citadel Advisors sold 1.9 million shares.

Metlife Inc. (NYSE:MET) is one of the largest life insurance companies in the world with a market value of $61 billion. It also provides asset management and employee benefits services to other corporations. A large number of hedge funds sold this stock during the third quarter. Clearbridge Investments, Carlson Capital, Arrowstreet Capital, Two Sigma Investments and Cambiar Investors sold off a substantial portion of this stock. These funds must be regretting their decision as the stock has shot off by 20% in the last one month and is trading near the top of its yearly trading range at ~$55. The company recently announced a $3 billion stock buyback program in November and it also plans to spin off its USA based retail insurance business in the near future. The stock is currently giving a dividend yield of 2.89%. The number of elite funds long Metlife declined by 8 to 37 during the third quarter.

Western Alliance Bancorporation (NYSE:WAL), like Metlife Inc. (NYSE:MET), is trading near the top of its 52 week price range. Sirios Capital Management was the biggest hedge fund seller of this stock in the third quarter. The fund decreased Western Alliance Bancorporation (NYSE:WAL) holdings in its portfolio to 2% from 2.65% held previously. Alyeska Investment, Millenium Management, Balyasny Asset Management each sold more than 150,000 shares of this stock.  New York based hedge fund Clinton Group sold off its entire stake in the company. The company has a market capitalization of $4.96 billion and an earnings multiple of 19x. 8 out of the 9 analysts covering the stock have rated it as a buy and the mean earnings estimate is $2.5 per share for the current fiscal year. The number of funds from our system that hold Western Alliance Bancorporation (NYSE:WAL) declined to 26 from 34 quarter over quarter.

Paypal Holdings Inc. (NASDAQ:PYPL) is the world’s largest digital payments service provider and is expected by many bulls to do well in the long run, as the financial service space moves rapidly towards a “cashless” model. However, many hedge funds dumped the stock during the third quarter as the earnings multiple of the stock seems high at 34x. Stephen Mande’s Lone Pine Capital sold off its entire 1.87% portfolio holding in the stock during the quarter ending September. D.E. Shaw and Renaissance Technologies were the other famous hedge funds which sold millions of shares of this stock. The company has branched into a number of financial service areas such as “social payments” as well as lending to its vast merchant base. The number of funds in our database of 742 elite funds that have Paypal Holdings Inc. (NASDAQ:PYPL) in their portfolios decreased by 10 to 74 during the third quarter.

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