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CreXus Investment Corp. (CXS) acquires, manages, and finances, directly or through its subsidiaries, commercial mortgage loans & other commercial real estate debt, commercial mortgage-backed securities & other commercial real estate-related assets. CreXus Investment Corp. is externally managed by FIDAC which is a wholly owned subsidiary of Annaly Capital Management, Inc. The company’s stated goal is “to provide attractive risk-adjusted returns over the long-term, primarily through dividends and secondarily through capital appreciation.” A seasoned investment team operating in the complex (but very lucrative) field of CMBS/RMBS that’s paying a 9.5% dividend (that it’s committed to growing) makes this stock a favorite among dividend investors.

A quick look at the top 13F filers for this stock as of Q1 2011 reveals 2 developments:

(i) A lot of institutional buyers bought into this stock in Q1 and ALL of the existing holders increasing exposure significantly.

(ii) A lot of those buyers were hedge funds (SAB, Jennison Assoc., Third Point, Pine River, Rima Mgmt) most of which just started positions.


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Since these buyers increased or initiated positions (at around $13 a share), CreXus has traded down on no news … other than increasing concerns over the European sovereign debt “issue”. A look at their excellent monthly commentary gives a very detailed view into their investment process and outlook ... none of which will prevent them from executing on their business model going forward. But the fear-based selloff affords investors a chance to follow the “Smart Money” crowd in getting into CreXus at a discount:


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Source: Dividend Stock Yielding 9.5% With a Lot of Hedge Funds Buying