Hedge Funds Are Selling Verastem Inc (VSTM)

Judging by the fact that Verastem Inc (NASDAQ:VSTM) has faced a declination in interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few hedgies who sold off their full holdings in the third quarter. Interestingly, Kevin Kotler’s Broadfin Capital sold off the biggest investment of all the hedgies watched by Insider Monkey, comprising close to $7.9 million in stock, and Robert B. Gillam’s McKinley Capital Management was right behind this move, as the fund cut about $2.2 million worth of shares. These bearish behaviors are important to note, as total hedge fund interest fell by 9 funds in the third quarter.

Let’s go over hedge fund activity in other stocks similar to Verastem Inc (NASDAQ:VSTM). These stocks are Bon-Ton Stores, Inc. (NASDAQ:BONT), Gulf Resources, Inc. (NASDAQ:GURE), Aviat Networks Inc (NASDAQ:AVNW), and Carolina Bank Holding Inc. (NC) (NASDAQ:CLBH). This group of stocks’ market caps resembles Verastem Inc (NASDAQ:VSTM)’s market cap.

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 $11 million. That figure was $4 million in Verastem Inc (NASDAQ:VSTM)’s case. Bon-Ton Stores, Inc. (NASDAQ:BONT) is the most popular stock in this table. On the other hand, Gulf Resources, Inc. (NASDAQ:GURE) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Verastem Inc (NASDAQ:VSTM) is even less popular than Gulf Resources, Inc. (NASDAQ:GURE). 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.