Hedge Fund Sentiment Is Stagnant On California Water Service Group (CWT)

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 go over hedge fund activity in other stocks – not necessarily in the same industry as California Water Service Group (NYSE:CWT) but similarly valued. These stocks are International Speedway Corporation (NASDAQ:ISCA), Premier Inc (NASDAQ:PINC), Depomed Inc (NASDAQ:DEPO), and AMN Healthcare Services, Inc. (NYSE:AHS). This group of stocks’ market caps resemble CWT’s market cap.

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 $225 million. That figure was $80 million in CWT’s case. AMN Healthcare Services, Inc. (NYSE:AHS) is the most popular stock in this table. On the other hand International Speedway Corporation (NASDAQ:ISCA) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks California Water Service Group (NYSE:CWT) is even less popular than ISCA. 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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