Hedge Funds Are Selling Tremor Video Inc (TRMR)

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We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: LMR 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 TRMR as a viable investment and initiated a position in the stock.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Tremor Video Inc (NYSE:TRMR) but similarly valued. These stocks are Trillium Therapeutics Inc. (NASDAQ:TRIL), RADCOM Ltd. (NASDAQ:RDCM), Mast Therapeutics Inc (NYSEMKT:MSTX), and Higher One Holdings, Inc (NYSE:ONE). This group of stocks’ market values are closest to TRMR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TRIL 8 14983 1
RDCM 4 13912 -1
MSTX 7 8108 0
ONE 14 15693 -2

As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $13 million, higher than the $8 million in TRMR’s case. Higher One Holdings, Inc (NYSE:ONE) is the most popular stock in this table, while RADCOM Ltd. (NASDAQ:RDCM) is the least popular one with only 4 bullish hedge fund positions. Tremor Video Inc (NYSE:TRMR) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ONE might be a better candidate to consider a long position.

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