Apollo Residential Mortgage Inc (NYSE:AMTG) was in 8 hedge funds’ portfolio at the end of December. AMTG has experienced an increase in enthusiasm from smart money recently. There were 6 hedge funds in our database with AMTG holdings at the end of the previous quarter.
If you’d ask most investors, hedge funds are assumed to be underperforming, old investment vehicles of years past. While there are over 8000 funds in operation today, we choose to focus on the masters of this club, around 450 funds. It is widely believed that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by paying attention to their best investments, we have spotted a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Equally as important, positive insider trading sentiment is another way to parse down the world of equities. As the old adage goes: there are lots of motivations for an insider to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this tactic if you know what to do (learn more here).
With these “truths” under our belt, let’s take a look at the key action regarding Apollo Residential Mortgage Inc (NYSE:AMTG).
What does the smart money think about Apollo Residential Mortgage Inc (NYSE:AMTG)?
At the end of the fourth quarter, a total of 8 of the hedge funds we track held long positions in this stock, a change of 33% from the third quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings significantly.
According to our comprehensive database, Millennium Management, managed by Israel Englander, holds the largest position in Apollo Residential Mortgage Inc (NYSE:AMTG). Millennium Management has a $9 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Balestra, managed by James Melcher, which held a $6 million position; 1.9% of its 13F portfolio is allocated to the company. Other hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Andy Redleaf’s Whitebox Advisors and Andrew R. Midler’s Savitr Capital.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Balestra, managed by James Melcher, initiated the largest position in Apollo Residential Mortgage Inc (NYSE:AMTG). Balestra had 6 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $1 million investment in the stock during the quarter. The only other fund with a new position in the stock is John Overdeck and David Siegel’s Two Sigma Advisors.
How are insiders trading Apollo Residential Mortgage Inc (NYSE:AMTG)?
Insider buying is best served when the company we’re looking at has experienced transactions within the past 180 days. Over the last half-year time period, Apollo Residential Mortgage Inc (NYSE:AMTG) has seen 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Apollo Residential Mortgage Inc (NYSE:AMTG). These stocks are Education Realty Trust, Inc. (NYSE:EDR), Associated Estates Realty Corporation (NYSE:AEC), Dynex Capital Inc (NYSE:DX), Silver Bay Realty Trust Corp (NYSE:SBY), and Resource Capital Corp. (NYSE:RSO). This group of stocks belong to the reit – residential industry and their market caps are closest to AMTG’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Education Realty Trust, Inc. (NYSE:EDR) | 4 | 1 | 3 |
| Associated Estates Realty Corporation (NYSE:AEC) | 6 | 0 | 5 |
| Dynex Capital Inc (NYSE:DX) | 6 | 0 | 1 |
| Silver Bay Realty Trust Corp (NYSE:SBY) | 11 | 8 | 3 |
| Resource Capital Corp. (NYSE:RSO) | 7 | 0 | 0 |
With the returns shown by the aforementioned strategies, retail investors must always monitor hedge fund and insider trading sentiment, and Apollo Residential Mortgage Inc (NYSE:AMTG) shareholders fit into this picture quite nicely.
