Do Hedge Funds Love AR Capital Acquisition Corp (AUMA)?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Q Investments (Specter Holdings). One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case here because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Bulldog Investors).

Let’s go over hedge fund activity in other stocks similar to AR Capital Acquisition Corp (NASDAQ:AUMA). We will take a look at Destination XL Group Inc (NASDAQ:DXLG), Angie’s List Inc (NASDAQ:ANGI), Reading International, Inc. (NASDAQ:RDI), and Everyday Health Inc (NYSE:EVDY). All of these stocks’ market caps are closest to AR Capital Acquisition Corp (NASDAQ:AUMA)’s market cap.

As you can see, these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $164 million in AR Capital Acquisition Corp (NASDAQ:AUMA)’s case. Destination XL Group Inc (NASDAQ:DXLG) is the most popular stock in this table. On the other hand, Everyday Health Inc (NYSE:EVDY) is the least popular one with only 9 bullish hedge fund positions. AR Capital Acquisition Corp (NASDAQ:AUMA) 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, Destination XL Group Inc (NASDAQ:DXLG) might be a better candidate to consider a long position.