Is American Renal Associates Holdings Inc (ARA) Going To Burn These Hedge Funds?

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that dumped their entire stakes in the stock during the third quarter. It’s worth mentioning that Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management dumped the largest stake of the “upper crust” of funds tracked by Insider Monkey, valued at close to $7.2 million in stock, and Jeremy Green’s Redmile Group was right behind this move, as the fund dropped about $4.3 million worth of shares.

Let’s also examine hedge fund activity in other stocks similar to American Renal Associates Holdings Inc (NYSE:ARA). We will take a look at Atwood Oceanics, Inc. (NYSE:ATW), Keryx Biopharmaceuticals (NASDAQ:KERX), Aceto Corporation (NASDAQ:ACET), and FTD Companies Inc (NASDAQ:FTD). This group of stocks’ market valuations resemble ARA’s market valuation.

As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $89 million. That figure was $327 million in ARA’s case. Atwood Oceanics, Inc. (NYSE:ATW) is the most popular stock in this table. On the other hand Keryx Biopharmaceuticals (NASDAQ:KERX) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks American Renal Associates Holdings Inc (NYSE:ARA) is even less popular than KERX. 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.

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