Here is What Hedge Funds Think About RTI Surgical Inc. (RTIX)

We view hedge fund selling in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: DAFNA Capital Management. 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 here because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Algert Coldiron Investors).

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as RTI Surgical Inc. (NASDAQ:RTIX) but similarly valued. These stocks are Neovasc Inc. (NASDAQ:NVCN), Baldwin & Lyons Inc (NASDAQ:BWINB), Del Frisco’s Restaurant Group Inc (NASDAQ:DFRG), and Hampton Roads Bankshares, Inc. (NASDAQ:HMPR). This group of stocks’ market valuations matches RTI Surgical Inc. (NASDAQ:RTIX)’s market valuation.

As you can see, these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $68 million. That figure was $44 million in RTI Surgical Inc. (NASDAQ:RTIX)’s case. Del Frisco’s Restaurant Group Inc (NASDAQ:DFRG) is the most popular stock in this table. On the other hand, Baldwin & Lyons Inc (NASDAQ:BWINB) is the least popular one with only 5 bullish hedge fund positions. RTI Surgical Inc. (NASDAQ:RTIX) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Del Frisco’s Restaurant Group Inc (NASDAQ:DFRG) might be a better candidate to consider a long position.