Five Cheap Finance Stocks With Big Hedge Fund Support

#4 Fortress Investment Group LLC (NYSE:FIG)

– Number of Hedge Fund Holders (as of March 31): 23
– Total Value of Hedge Fund Holdings (as of March 31): $126.28 million
– Hedge Fund Holdings as Percent of Float (as of March 31): 6.80%

Fortress Investment Group LLC (NYSE:FIG) was included in 23 funds’ equity portfolios at the end of March, up by five over the quarter. One reason more hedge funds could be holding shares of the company could be that Fortress’ stock is trading at just 5.5 times forward earnings. Another reason could be that the company raised its base quarterly dividend by 13% to $0.09 per dividend-paying share in May. The company also has total uncalled capital or ‘dry powder’ of $7.3 billion at the end of March. If used correctly, the dry powder can unlock substantial value in the shares, which so far have been roughly flat year-to-date.

#3 WMIH CORPORATION (NASDAQ:WMIH)

– Number of Hedge Fund Holders (as of March 31): 33
– Total Value of Hedge Fund Holdings (as of March 31): $150.3 million
– Hedge Fund Holdings as Percent of Float (as of March 31): 31.20%

WMIH CORPORATION (NASDAQ:WMIH) emerged from bankruptcy proceedings as the successor to Washington Mutual in March, 2012. Since its emergence, the company has been operating in runoff mode and has not written any new business since September of 2008. The company has, however, raised substantial capital from KKR to fund acquisitions to take advantage of its $6 billion in NOLs at the end of December. Because of its capital raise, some view WMIH as a KKR ‘special purpose acquisition vehicle’ and think the success of WMIH depends on KKR’s investing talents. Overall, 33 hedge funds tracked by Insider Monkey are long the stock because they think WMIH will make good acquisitions that will deliver solid returns on capital.

#2 MGIC Investment Corp. (NYSE:MTG)

– Number of Hedge Fund Holders (as of March 31): 37
– Total Value of Hedge Fund Holdings (as of March 31): $745.3 million
– Hedge Fund Holdings as Percent of Float (as of March 31): 28.60%

MGIC Investment Corp. (NYSE:MTG)’s shares have retreated because the company raised rates on its new insurance to earn decent returns on capital. Many investors thought the rate hikes would shrink the company’s new insurance written and ultimately lower MGIC’s income. Some analysts are unfazed, however. BTIG’s Mark Palmer believes the impact of the pricing competition within the PMI industry is already baked into the stock price and has a price target of $12 a share. According to the latest round of 13F filings, 37 investors agree with the bullish sentiment. Doug Silverman and Alexander Klabin’s Senator Investment Group was a top shareholder at the end of March.

#1 Regions Financial Corp (NYSE:RF)

– Number of Hedge Fund Holders (as of March 31): 41
– Total Value of Hedge Fund Holdings (as of March 31): $802.99 million
– Hedge Fund Holdings as Percent of Float (as of March 31): 7.90%

Regions Financial Corp (NYSE:RF) reported a solid first quarter, with EPS of $0.20 on revenues of $1.37 billion, versus estimates of $0.19 and $1.34 billion, respectively. Average loans and leases rose by 5% year-over-year to $82 billion while NIM expanded 11 basis points sequentially to 3.19%. Tangible book value was $8.97 per share, up from $8.39 in the first quarter of 2015. Given the strong economy and the expected rising rates, it isn’t surprising that 41 elite funds held shares of the bank at the end of March; look for the stock to do well as interest rates normalize.

Disclosure: none