Is Blue Hills Bancorp Inc (BHBK) A Good Stock To Buy?

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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 now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Blue Hills Bancorp Inc (NASDAQ:BHBK) but similarly valued. These stocks are Sangamo Biosciences, Inc. (NASDAQ:SGMO), Donegal Group Inc (NASDAQ:DGICA), Cascade Bancorp (NASDAQ:CACB), and FormFactor, Inc. (NASDAQ:FORM). This group of stocks’ market valuations match BHBK’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SGMO 19 66422 -3
DGICA 6 5583 1
CACB 6 83032 -1
FORM 18 34224 1

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. While in BHBK’s case that figure stood at $25 million. Sangamo Biosciences, Inc. (NASDAQ:SGMO) is the most popular stock in this table, while Donegal Group Inc (NASDAQ:DGICA) is the least popular one with only 6 bullish hedge fund positions. Blue Hills Bancorp Inc (NASDAQ:BHBK) 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 SGMO might be a better candidate to consider a long position.

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