Is B. Riley Financial Inc (RILY) A Good Stock To Buy?

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as B. Riley Financial Inc (NASDAQ:RILY) but similarly valued. We will take a look at Handy and Harman Ltd (NASDAQ:HNH), Inotek Pharmaceuticals Corp (NASDAQ:ITEK), Amber Road Inc (NYSE:AMBR), and Agilysys, Inc. (NASDAQ:AGYS). This group of stocks’ market valuations are similar to RILY’s market valuation.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $98 million. That figure was $64 million in RILY’s case. Inotek Pharmaceuticals Corp (NASDAQ:ITEK) is the most popular stock in this table. On the other hand Handy and Harman Ltd (NASDAQ:HNH) is the least popular one with only 3 bullish hedge fund positions. B. Riley Financial Inc (NASDAQ:RILY) 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 ITEK might be a better candidate to consider taking a long position in.