CreXus Investment Corp. (NYSE: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.
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:
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.