Is Alliance Holdings GP, L.P. (AHGP) A Good Stock To Buy?

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With a general bullishness amongst the heavyweights, key money managers have jumped into Alliance Holdings GP, L.P. (NASDAQ:AHGP) headfirst. Citadel Investment Group, managed by Ken Griffin, established the largest position in Alliance Holdings GP, L.P. (NASDAQ:AHGP). Citadel Investment Group had $0.2 million invested in the company at the end of the quarter. The only other fund with a brand new AHGP position is David Dreman’s Dreman Value Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Alliance Holdings GP, L.P. (NASDAQ:AHGP) but similarly valued. These stocks are The Dolan Company (NYSE:DM), Masonite International Corp (NYSE:DOOR), Copa Holdings, S.A. (NYSE:CPA), and Calumet Specialty Products Partners, L.P (NASDAQ:CLMT). This group of stocks’ market caps resemble AHGP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DM 6 13093 1
DOOR 28 553480 1
CPA 14 164856 -4
CLMT 8 22180 0

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $188 million, as compared to $21 million in AHGP’s case. Masonite International Corp (NYSE:DOOR) is the most popular stock in this table, while The Dolan Company (NYSE:DM) is the least popular one with only 6 bullish hedge fund positions. Alliance Holdings GP, L.P. (NASDAQ:AHGP) is not the least popular stock in this group, but the 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 DOOR might be a better candidate to consider for a long position.

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