Harmony Merger Corp (HRMNU): Hedge Fund Sentiment Unchanged

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Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Harmony Merger Corp (NASDAQ:HRMNU) but similarly valued. We will take a look at Resource America Inc (NASDAQ:REXI), EVINE Live Inc (NASDAQ:EVLV), Perion Network Ltd (NASDAQ:PERI), and ModusLink Global Solutions, Inc. (NASDAQ:MLNK). This group of stocks’ market caps is the closest to Harmony Merger Corp (NASDAQ:HRMNU)’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
REXI 6 10585 0
EVLV 16 47630 1
PERI 7 3374 -2
MLNK 11 61293 0

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 $31 million. That figure was $26 million in HRMNU’s case. EVINE Live Inc (NASDAQ:EVLV) is the most popular stock in this table. On the other hand, Resource America Inc (NASDAQ:REXI) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Harmony Merger Corp (NASDAQ:HRMNU) is even less popular than Resource America Inc (NASDAQ:REXI). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

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