Engility Holdings Inc (EGL): Are Hedge Funds Right About This Stock?

As industrywide interest jumped, specific money managers have jumped into Engility Holdings Inc (NYSE:EGL) headfirst. Hawk Ridge Management, managed by David Brown, established the largest position in Engility Holdings Inc (NYSE:EGL). Hawk Ridge Management had $7 million invested in the company at the end of the quarter. Chao Ku’s Nine Chapters Capital Management also initiated a $1 million position during the quarter. The following funds were also among the new EGL investors: Glenn Russell Dubin’s Highbridge Capital Management and Dmitry Balyasny’s Balyasny Asset Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Engility Holdings Inc (NYSE:EGL) but similarly valued. These stocks are Merrimack Pharmaceuticals Inc (NASDAQ:MACK), Videocon d2h Ltd – ADR (NASDAQ:VDTH), Capstead Mortgage Corporation (NYSE:CMO), and US Ecology Inc. (NASDAQ:ECOL). This group of stocks’ market caps match EGL’s market cap.

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 $73 million. That figure was $35 million in EGL’s case. Videocon d2h Ltd – ADR (NASDAQ:VDTH) is the most popular stock in this table. On the other hand Capstead Mortgage Corporation (NYSE:CMO) is the least popular one with only 7 bullish hedge fund positions. Engility Holdings Inc (NYSE:EGL) is not the least popular stock in this group but hedge fund interest is just 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 VDTH might be a better candidate to consider a long position.