Hedge Funds Are Selling McGrath RentCorp (MGRC)

Judging by the fact that McGrath RentCorp (NASDAQ:MGRC) has faced a declination in interest from hedge fund managers, it’s easy to see that there exists a select few hedgies that decided to sell off their entire stakes in the third quarter. Interestingly, D E Shaw dropped the largest stake of the 700 funds followed by Insider Monkey, worth close to $0.8 million in stock. Ken Griffin’s fund, Citadel Investment Group, also sold off its stock, about $0.5 million worth of shares. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 3 funds in the third quarter.

Let’s now review hedge fund activity in other stocks similar to McGrath RentCorp (NASDAQ:MGRC). We will take a look at DHT Holdings Inc (NYSE:DHT), On Deck Capital Inc (NYSE:ONDK), Tsakos Energy Navigation Ltd. (NYSE:TNP), and Genomic Health, Inc. (NASDAQ:GHDX). All of these stocks’ market caps are similar to McGrath RentCorp (NASDAQ:MGRC)’s market cap.

As you can see, these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $238 million. That figure was $13 million in McGrath RentCorp (NASDAQ:MGRC)’s case. DHT Holdings Inc (NYSE:DHT) is the most popular stock in this table. On the other hand, On Deck Capital Inc (NYSE:ONDK) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks McGrath RentCorp (NASDAQ:MGRC) is even less popular than On Deck Capital Inc (NYSE:ONDK). 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.