Hedge Funds Are Dumping Momo Inc (ADR) (MOMO)

Judging by the fact that Momo Inc (ADR) (NASDAQ:MOMO) has witnessed bearish sentiment from hedge fund managers, we can see that there were a few money managers who sold off their positions entirely last quarter. At the top of the heap, Karthik Sarma’s SRS Investment Management said goodbye to the largest position of all the hedgies watched by Insider Monkey, valued at an estimated $23.2 million in stock, and Philippe Laffont’s Coatue Management was right behind this move, as the fund said goodbye to about $8.7 million worth. These moves are important to note, as aggregate hedge fund interest fell by 3 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Momo Inc (ADR) (NASDAQ:MOMO) but similarly valued. We will take a look at Weibo Corp (ADR) (NASDAQ:WB), Diamond Offshore Drilling Inc (NYSE:DO), IMAX Corporation (USA) (NYSE:IMAX), and Franks International NV (NYSE:FI). This group of stocks’ market valuations are similar to MOMO’s market valuation.

As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $78 million. That figure was $86 million in MOMO’s case. Diamond Offshore Drilling Inc (NYSE:DO) is the most popular stock in this table. On the other hand Weibo Corp (ADR) (NASDAQ:WB) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Momo Inc (ADR) (NASDAQ:MOMO) is as less popular as WB. 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.