Do Hedge Funds Love Contango Oil & Gas Company (MCF)?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Highbridge Capital Management. 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 in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was D E Shaw).

Let’s now review hedge fund activity in other stocks similar to Contango Oil & Gas Company (NYSEMKT:MCF). We will take a look at Scorpio Bulkers Inc (NYSE:SALT), Franklin Covey Co. (NYSE:FC), Electrum Special Acquisition Corp (NASDAQ:ELECU), and Lantheus Holdings Inc (NASDAQ:LNTH). This group of stocks’ market valuations match MCF’s market valuation.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $63 million in MCF’s case. Electrum Special Acquisition Corp (NASDAQ:ELECU) is the most popular stock in this table. On the other hand Franklin Covey Co. (NYSE:FC) is the least popular one with only eight bullish hedge fund positions. Contango Oil & Gas Company (NYSEMKT:MCF) 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 ELECU might be a better candidate to consider taking a long position in.

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Disclosure: None