Heartland Financial USA Inc (HTLF): Are Hedge Funds Right About This Stock?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: D E Shaw. 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 none of the 700+ hedge funds tracked by Insider Monkey identified Heartland Financial USA Inc (NASDAQ:HTLF) as a viable investment and initiated a position in the stock.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Heartland Financial USA Inc (NASDAQ:HTLF) but similarly valued. We will take a look at P.H. Glatfelter Company (NYSE:GLT), Speedway Motorsports, Inc. (NYSE:TRK), Bona Film Group Ltd (ADR) (NASDAQ:BONA), and Hecla Mining Company (NYSE:HL). All of these stocks’ market caps are closest to Heartland Financial USA Inc (NASDAQ:HTLF)’s market cap.

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 $15 million. That figure was $11 million in Heartland Financial USA Inc (NASDAQ:HTLF)’s case. Speedway Motorsports, Inc. (NYSE:TRK) is the most popular stock in this table. On the other hand, Bona Film Group Ltd (ADR) (NASDAQ:BONA) is the least popular one with only 7 bullish hedge fund positions. Heartland Financial USA Inc (NASDAQ:HTLF) 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, Speedway Motorsports, Inc. (NYSE:TRK) might be a better candidate to consider a long position.