Do Hedge Funds Love magicJack VocalTec Ltd (CALL)?

We view hedge fund selling in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: LMR Partners. 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 Tudor Investment Corp).

Let’s now review hedge fund activity in other stocks similar to magicJack VocalTec Ltd (NASDAQ:CALL). These stocks are Planet Payment Inc (NASDAQ:PLPM), RealNetworks Inc (NASDAQ:RNWK), ESSA Bancorp, Inc. (NASDAQ:ESSA), and United Online, Inc. (NASDAQ:UNTD). This group of stocks’ market valuations matches magicJack VocalTec Ltd (NASDAQ:CALL)’s market valuation.

As you can see, these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $11 million in magicJack VocalTec Ltd (NASDAQ:CALL)’s case. United Online, Inc. (NASDAQ:UNTD) is the most popular stock in this table. On the other hand, ESSA Bancorp, Inc. (NASDAQ:ESSA) is the least popular one with only 5 bullish hedge fund positions. magicJack VocalTec Ltd (NASDAQ:CALL) 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, United Online, Inc. (NASDAQ:UNTD) might be a better candidate to consider a long position.