The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtAnworth Mortgage Asset Corporation (NYSE:ANH) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.
Is Anworth Mortgage Asset Corporation (NYSE:ANH) worth your attention right now? Prominent investors were selling. The number of long hedge fund bets went down by 4 in recent months. Our calculations also showed that ANH isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most traders, hedge funds are assumed to be worthless, old financial tools of yesteryear. While there are over 8000 funds in operation at the moment, Our experts look at the aristocrats of this group, around 850 funds. These investment experts orchestrate most of the hedge fund industry’s total capital, and by observing their inimitable investments, Insider Monkey has deciphered a few investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Donald Sussman of Paloma Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to check out the key hedge fund action surrounding Anworth Mortgage Asset Corporation (NYSE:ANH).
What does smart money think about Anworth Mortgage Asset Corporation (NYSE:ANH)?
At the end of the first quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ANH over the last 18 quarters. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Anworth Mortgage Asset Corporation (NYSE:ANH), which was worth $7.8 million at the end of the third quarter. On the second spot was Winton Capital Management which amassed $0.9 million worth of shares. Millennium Management, Arrowstreet Capital, and D E Shaw were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Almitas Capital allocated the biggest weight to Anworth Mortgage Asset Corporation (NYSE:ANH), around 1.21% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, dishing out 0.02 percent of its 13F equity portfolio to ANH.
Because Anworth Mortgage Asset Corporation (NYSE:ANH) has experienced falling interest from the aggregate hedge fund industry, we can see that there is a sect of fund managers that elected to cut their full holdings heading into Q4. It’s worth mentioning that Andrew Weiss’s Weiss Asset Management sold off the biggest investment of the “upper crust” of funds watched by Insider Monkey, worth an estimated $0.6 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund cut about $0.3 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 4 funds heading into Q4.
Let’s go over hedge fund activity in other stocks similar to Anworth Mortgage Asset Corporation (NYSE:ANH). We will take a look at Pixelworks, Inc. (NASDAQ:PXLW), Galectin Therapeutics Inc. (NASDAQ:GALT), Neptune Wellness Solutions Inc (NASDAQ:NEPT), and GP Strategies Corporation (NYSE:GPX). This group of stocks’ market caps are similar to ANH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PXLW | 8 | 7919 | 1 |
| GALT | 3 | 190 | -1 |
| NEPT | 4 | 16529 | -1 |
| GPX | 12 | 31266 | 2 |
| Average | 6.75 | 13976 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $12 million in ANH’s case. GP Strategies Corporation (NYSE:GPX) is the most popular stock in this table. On the other hand Galectin Therapeutics Inc. (NASDAQ:GALT) is the least popular one with only 3 bullish hedge fund positions. Anworth Mortgage Asset Corporation (NYSE:ANH) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but still beat the market by 15.5 percentage points. Hedge funds were also right about betting on ANH as the stock returned 59.8% in Q2 and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Anworth Mortgage Asset Corp (NYSE:ANH)
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Disclosure: None. This article was originally published at Insider Monkey.
