We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of WMIH Corp (NASDAQ:WMIH) based on that data.
WMIH Corp (NASDAQ:WMIH) was in 31 hedge funds’ portfolios at the end of the third quarter of 2018. WMIH has experienced an increase in enthusiasm from smart money of late. There were 18 hedge funds in our database with WMIH holdings at the end of the previous quarter. Our calculations also showed that WMIH isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let’s view the key hedge fund action encompassing WMIH Corp (NASDAQ:WMIH).
What does the smart money think about WMIH Corp (NASDAQ:WMIH)?
At Q3’s end, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 72% from the previous quarter. On the other hand, there were a total of 19 hedge funds with a bullish position in WMIH at the beginning of this year. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Among these funds, Diamond Hill Capital held the most valuable stake in WMIH Corp (NASDAQ:WMIH), which was worth $112.6 million at the end of the third quarter. On the second spot was Greywolf Capital Management which amassed $90.1 million worth of shares. Moreover, Appaloosa Management LP, Rubric Capital Management, and Serengeti Asset Management were also bullish on WMIH Corp (NASDAQ:WMIH), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, key money managers were breaking ground themselves. Diamond Hill Capital, managed by Ric Dillon, assembled the largest position in WMIH Corp (NASDAQ:WMIH). Diamond Hill Capital had $112.6 million invested in the company at the end of the quarter. Jody LaNasa’s Serengeti Asset Management also made a $57.2 million investment in the stock during the quarter. The following funds were also among the new WMIH investors: Howard Marks’s Oaktree Capital Management, Howard Guberman’s Gruss Asset Management, and Leon Cooperman’s Omega Advisors.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as WMIH Corp (NASDAQ:WMIH) but similarly valued. These stocks are Global Net Lease, Inc. (NYSE:GNL), Grupo Simec S.A.B. de C.V. (NYSEAMEX:SIM), Industrial Logistics Properties Trust (NASDAQ:ILPT), and Knowles Corp (NYSE:KN). All of these stocks’ market caps are similar to WMIH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GNL | 3 | 17876 | -1 |
| SIM | 1 | 2175 | 0 |
| ILPT | 9 | 86914 | -1 |
| KN | 12 | 55643 | 0 |
| Average | 6.25 | 40652 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.25 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $568 million in WMIH’s case. Knowles Corp (NYSE:KN) is the most popular stock in this table. On the other hand Grupo Simec S.A.B. de C.V. (NYSEAMEX:SIM) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks WMIH Corp (NASDAQ:WMIH) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
