Hedge Fund Sentiment Is Stagnant On Heritage Financial Corporation (HFWA)

Due to the fact that Heritage Financial Corporation (NASDAQ:HFWA) has faced a falling interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedgies that decided to sell off their positions entirely in the third quarter. At the top of the heap, Fred Cummings’ Elizabeth Park Capital Management dumped the largest investment of the “upper crust” of funds monitored by Insider Monkey, totaling close to $5.5 million in stock. Robert Rodriguez and Steven Romick’s fund, First Pacific Advisors LLC, also dumped its stock, about $4.9 million worth of shares. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Heritage Financial Corporation (NASDAQ:HFWA) but similarly valued. We will take a look at Resources Connection, Inc. (NASDAQ:RECN), Forrester Research, Inc. (NASDAQ:FORR), Vascular Solutions, Inc. (NASDAQ:VASC), and Kraton Performance Polymers Inc (NYSE:KRA). This group of stocks’ market caps is similar to Heritage Financial Corporation (NASDAQ:HFWA)’s market cap.

As you can see, these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $56 million in Heritage Financial Corporation (NASDAQ:HFWA)’s case. Kraton Performance Polymers Inc (NYSE:KRA) is the most popular stock in this table. On the other hand, Forrester Research, Inc. (NASDAQ:FORR) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Heritage Financial Corporation (NASDAQ:HFWA) is even less popular than Forrester Research, Inc. (NASDAQ:FORR). 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.