How Ares Capital Corporation (ARCC) Stacks Up Against Its Peers

As one would reasonably expect, some big names were leading the bulls’ herd. Hutchin Hill Capital initiated the most outsized position in Ares Capital Corporation (NASDAQ:ARCC) which had $10.1 million invested in the company at the end of the quarter. Steve Pei’s Gratia Capital also made a $4.2 million investment in the stock during the quarter. The following funds were also among the new ARCC investors: Ken Griffin’s Citadel Investment Group, Robert I. Usdan and Wayne K. Goldstein’s Endicott Management, and Bruce Silver’s Silver Capital Management LLC.

Let’s now review hedge fund activity in other stocks similar to Ares Capital Corporation (NASDAQ:ARCC). We will take a look at Communications Sales & Leasing Inc (NASDAQ:CSAL), Bemis Company, Inc. (NYSE:BMS), Bio-Rad Laboratories, Inc. (NYSE:BIO), and Allison Transmission Holdings Inc (NYSE:ALSN). This group of stocks’ market valuations are similar to ARCC’s market valuation.

As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $776 million. That figure was $172 million in ARCC’s case. Allison Transmission Holdings Inc (NYSE:ALSN) is the most popular stock in this table. On the other hand Bemis Company, Inc. (NYSE:BMS) is the least popular one with only 16 bullish hedge fund positions. Ares Capital Corporation (NASDAQ:ARCC) 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 ALSN might be a better candidate to consider taking a long position in.

Disclosure: None