Approach Resources Inc. (AREX): Are Hedge Funds Right About This Stock?

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As aggregate interest increased, key hedge funds have been driving this bullishness. Marathon Asset Management assembled the most valuable position in Approach Resources Inc. (NASDAQ:AREX). Jeffrey Bronchick’s Cove Street Capital also initiated a $2.4 million position during the quarter. The other funds with new positions in the stock are Mark T. Gallogly’s Centerbridge Partners, Charles Davidson’s Wexford Capital, and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners.

Let’s go over hedge fund activity in other stocks similar to Approach Resources Inc. (NASDAQ:AREX). These stocks are StealthGas Inc. (NASDAQ:GASS), Tetraphase Pharmaceuticals Inc (NASDAQ:TTPH), Calamos Asset Management, Inc (NASDAQ:CLMS), and Castle Brands Inc (NYSEAMEX:ROX). All of these stocks’ market caps are similar to AREX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GASS 8 49685 0
TTPH 11 12294 1
CLMS 6 16639 -1
ROX 6 1201 1

As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $11 million in AREX’s case. Tetraphase Pharmaceuticals Inc (NASDAQ:TTPH) is the most popular stock in this table. On the other hand Calamos Asset Management, Inc (NASDAQ:CLMS) is the least popular one with only 6 bullish hedge fund positions. Approach Resources Inc. (NASDAQ:AREX) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TTPH might be a better candidate to consider taking a long position in.

Disclosure: None

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