Hedge Fund Interest In SM Energy Co. (SM) Flatlines

Judging by the fact that SM Energy Co. (NYSE:SM) has experienced declining sentiment from the entirety of the hedge funds that we track, we can see that there lies a certain “tier” of hedge funds that slashed their positions entirely heading into Q4. Interestingly, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the biggest investment of all the hedgies tracked by Insider Monkey, comprising close to $22.4 million in stock. Glenn Russell Dubin’s fund, Highbridge Capital Management, also cut its stock, about $18.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks similar to SM Energy Co. (NYSE:SM). We will take a look at Asbury Automotive Group, Inc. (NYSE:ABG), Teekay Corporation (NYSE:TK), CyrusOne Inc (NASDAQ:CONE), and Monro Muffler Brake Inc (NASDAQ:MNRO). This group of stocks’ market valuations are closest to SM Energy Co.’s market valuation.

As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $398 million. That figure was $229 million in SM Energy Co.’s case. Asbury Automotive Group, Inc. (NYSE:ABG) is the most popular stock in this table. On the other hand Monro Muffler Brake Inc (NASDAQ:MNRO) is the least popular one with only 16 bullish hedge fund positions. SM Energy Co. (NYSE:SM) 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 Asbury Automotive might be a better candidate to consider a long position in.