Is Arch Capital Group Ltd. (ACGL) A Good Stock To Buy?

Due to the fact that Arch Capital Group Ltd. (NASDAQ:ACGL) has witnessed falling interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few money managers that elected to cut their entire stakes last quarter. Interestingly, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital cut the biggest stake of the 700 funds watched by Insider Monkey, worth about $1.2 million in stock. Joel Greenblatt’s fund, Gotham Asset Management, also said goodbye to its stock, about $0.3 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks similar to Arch Capital Group Ltd. (NASDAQ:ACGL). These stocks are Cablevision Systems Corporation (NYSE:CVC), Dover Corp (NYSE:DOV), First Republic Bank (NYSE:FRC), and UDR, Inc. (NYSE:UDR). This group of stocks’ market valuations are similar to ACGL’s market valuation.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $652 million, compared to $716 million in ACGL’s case. Cablevision Systems Corporation (NYSE:CVC) is the most popular stock in this table. On the other hand UDR, Inc. (NYSE:UDR) is the least popular one with only 9 bullish hedge fund positions. Arch Capital Group Ltd. (NASDAQ:ACGL) 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 CVC might be a better candidate to consider a long position.