Is Agree Realty Corporation (ADC) A Good Stock To Buy?

Because Agree Realty Corporation (NYSE:ADC) has experienced falling interest from hedge fund managers, it’s easy to see that there was a specific group of money managers that slashed their full holdings in the third quarter. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management cut the largest stake of the “upper crust” of funds monitored by Insider Monkey, comprising close to $2.8 million in stock. John Fichthorn’s fund, Dialectic Capital Management, also sold off its stock, about $0.4 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 4 funds in the third quarter.

Let’s now review hedge fund activity in other stocks similar to Agree Realty Corporation (NYSE:ADC). These stocks are LGI Homes Inc (NASDAQ:LGIH), WMIH Corp (NASDAQ:WMIH), Navios Maritime Acquisition Corp (NYSE:NNA), and Kelly Services, Inc. (NASDAQ:KELYA). This group of stocks’ market caps resemble ADC’s market cap.

As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $68 million. That figure was $16 million in ADC’s case. WMIH Corp (NASDAQ:WMIH) is the most popular stock in this table. On the other hand Kelly Services, Inc. (NASDAQ:KELYA) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Agree Realty Corporation (NYSE:ADC) is even less popular than KELYA. 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.