Ares Commercial Real Estate Corp (ACRE): Are Hedge Funds Right About This Stock?

Seeing as Ares Commercial Real Estate Corp (NYSE:ACRE) has experienced a bearish sentiment from the entirety of the hedge funds we track, we can see that there were a few fund managers that slashed their full holdings in the third quarter. At the top of the heap, Michael M. Rothenberg’s Moab Capital Partners sold off the largest investment of all the hedgies watched by Insider Monkey, totaling close to $5.8 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund dropped about $2.6 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 1 funds in the third quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Ares Commercial Real Estate Corp (NYSE:ACRE) but similarly valued. These stocks are Xcerra Corp (NASDAQ:XCRA), Arrowhead Research Corp (NASDAQ:ARWR), Ocean Rig UDW Inc (NASDAQ:ORIG), and Martha Stewart Living Omnimedia, Inc. (NYSE:MSO). This group of stocks’ market caps match ACRE’s market cap.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $49 million. That figure was $23 million in ACRE’s case. Xcerra Corp (NASDAQ:XCRA) is the most popular stock in this table. On the other hand Arrowhead Research Corp (NASDAQ:ARWR) is the least popular one with only 10 bullish hedge fund positions. Ares Commercial Real Estate Corp (NYSE:ACRE) 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 XCRA might be a better candidate to consider a long position.