Arch Capital Group Ltd. (ACGL): Are Hedge Funds Right About This Stock?

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that cut their entire stakes in the stock during the third quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management cut the largest position of all the hedgies watched by Insider Monkey, comprising close to $5.5 million in stock, and Jacob Gottlieb’s Visium Asset Management was right behind this move, as the fund dropped about $5.3 million worth of shares.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Arch Capital Group Ltd. (NASDAQ:ACGL) but similarly valued. These stocks are Newfield Exploration Co. (NYSE:NFX), Dr. Reddy’s Laboratories Limited (ADR) (NYSE:RDY), Michael Kors Holdings Ltd (NYSE:KORS), and Amdocs Limited (NYSE:DOX). This group of stocks’ market caps are closest to ACGL’s market cap.

As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $587 million. That figure was $812 million in ACGL’s case. Newfield Exploration Co. (NYSE:NFX) is the most popular stock in this table. On the other hand Dr. Reddy’s Laboratories Limited (ADR) (NYSE:RDY) is the least popular one with only 9 bullish hedge fund positions. Arch Capital Group Ltd. (NASDAQ:ACGL) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NFX might be a better candidate to consider taking a long position in.

Disclosure: None