Hedge Funds Are Dumping Cambridge Capital Acquisition Corp (CAMB)

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: 683 Capital Partners. 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 in this case because none of the 700+ hedge funds tracked by Insider Monkey identified CAMB as a viable investment and initiated a position in the stock.

Let’s also examine hedge fund activity in other stocks similar to Cambridge Capital Acquisition Corp (NASDAQ:CAMB). These stocks are Horizon Technology Finance Corp (NASDAQ:HRZN), Evans Bancorp Inc. (NYSEMKT:EVBN), Unique Fabricating Inc (NYSEMKT:UFAB), and Alliance HealthCare Services, Inc. (NASDAQ:AIQ). This group of stocks’ market valuations are similar to CAMB’s market valuation.

As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $7 million in CAMB’s case. Horizon Technology Finance Corp (NASDAQ:HRZN) is the most popular stock in this table. On the other hand Evans Bancorp Inc. (NYSEMKT:EVBN) and Unique Fabricating Inc (NYSEMKT:UFAB) are the least popular ones with only 4 bullish hedge fund positions, on par with Cambridge Capital Acquisition Corp (NASDAQ:CAMB). 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.