Here is What Hedge Funds Think About Valhi, Inc. (VHI)

Since Valhi, Inc. (NYSE:VHI) has faced bearish sentiment from hedge fund managers, it’s safe to say that there is a sect of funds that decided to sell off their positions entirely in the third quarter. Interestingly, Jay Petschek and Steven Major’s Corsair Capital Management sold off the biggest investment of the “upper crust” of funds monitored by Insider Monkey, worth an estimated $0.2 million in stock, and Murray Stahl’s Horizon Asset Management was right behind this move, as the fund dumped about $0.1 million worth of shares. These transactions are important to note, as aggregate hedge fund interest dropped by 2 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Valhi, Inc. (NYSE:VHI) but similarly valued. We will take a look at Windstream Corporation (NASDAQ:WIN), Universal Electronics Inc (NASDAQ:UEIC), IAMGOLD Corporation (USA) (NYSE:IAG), and The Rubicon Project Inc (NYSE:RUBI). All of these stocks’ market caps resemble VHI’s market cap.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $41 million, compared to just $1 million in VHI’s case. The Rubicon Project Inc (NYSE:RUBI) is the most popular stock in this table. On the other hand IAMGOLD Corporation (USA) (NYSE:IAG) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Valhi, Inc. (NYSE:VHI) is even less popular than IAG. 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.