Does Validus Holdings, Ltd. (VR) Represent a Good Investment?

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Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that said goodbye to their entire stakes in the stock during the third quarter. At the top of the heap, Jacob Gottlieb’s Visium Asset Management said goodbye to the biggest stake of the 700 funds studied by Insider Monkey, comprising close to $6.2 million in stock. Michael Platt and William Reeves’s fund, BlueCrest Capital Mgmt., also dropped its stock, about $0.3 million worth.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Validus Holdings, Ltd. (NYSE:VR) but similarly valued. We will take a look at Bright Horizons Family Solutions Inc (NYSE:BFAM), DCP Midstream Partners, LP (NYSE:DPM), Pool Corporation (NASDAQ:POOL), and Cullen/Frost Bankers, Inc. (NYSE:CFR). All of these stocks’ market caps match VR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BFAM 12 86899 -3
DPM 8 21744 0
POOL 26 205269 3
CFR 13 65558 -1

As you can see these stocks had an average of 15 funds with bullish positions and the average amount invested in these stocks was $95 million, which is lower than the $220 million figure in VR’s case. Pool Corporation (NASDAQ:POOL) is the most popular stock in this table. On the other hand DCP Midstream Partners, LP (NYSE:DPM) is the least popular one with only eight investors holding shares. Validus Holdings, Ltd. (NYSE:VR) 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 Pool Corporation (NASDAQ:POOL) might be a better candidate to consider taking a long position in.

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