Is 58.com Inc (ADR) (WUBA) Going To Burn These Hedge Funds?

Seeing as 58.com Inc (ADR) (NYSE:WUBA) has experienced bearish sentiment from the smart money, we can see that there is a sect of hedgies that decided to sell off their entire stakes heading into Q4. Interestingly, Josh Resnick’s Jericho Capital Asset Management dropped the biggest stake of all the hedgies followed by Insider Monkey, comprising about $42.5 million in stock, and Pasco Alfaro / Richard Tumure’s Miura Global Management was right behind this move, as the fund said goodbye to about $32.1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 6 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks similar to 58.com Inc (ADR) (NYSE:WUBA). These stocks are Zillow Inc (NASDAQ:Z), Pilgrim’s Pride Corporation (NASDAQ:PPC), Align Technology, Inc. (NASDAQ:ALGN), and CIT Group Inc. (NYSE:CIT). This group of stocks’ market caps match WUBA’s market cap.

As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $688 million. That figure was $1038 million in WUBA’s case. Align Technology, Inc. (NASDAQ:ALGN) is the most popular stock in this table. On the other hand Pilgrim’s Pride Corporation (NASDAQ:PPC) is the least popular one with only 21 bullish hedge fund positions. 58.com Inc (ADR) (NYSE:WUBA) 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 ALGN might be a better candidate to consider a long position.

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