Is BlueLinx Holdings Inc. (BXC) Going to Burn These Hedge Funds?

Due to the fact that BlueLinx Holdings Inc. (NYSE:BXC) has faced a declination in interest from the entirety of the hedge funds we track, logic holds that there is a sect of hedgies who sold off their full holdings in the third quarter. At the top of the heap, Joseph A. Jolson’s Harvest Capital Strategies dropped the largest investment of the 700 funds tracked by Insider Monkey, totaling about $1.6 million in stock.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as BlueLinx Holdings Inc. (NYSE:BXC) but similarly valued. These stocks are RCS Capital Corp (NYSE:RCAP), Quest Resource Holding Corp (NASDAQ:QRHC), ReachLocal Inc. (NASDAQ:RLOC), and Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS). This group of stocks’ market valuations match BXC’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 $12 million, which is lower than the $46 million in BXC’s case. RCS Capital Corp (NYSE:RCAP) is the most popular stock in this table. On the other hand ReachLocal Inc. (NASDAQ:RLOC) is the least popular one with only 6 bullish hedge fund positions. BlueLinx Holdings Inc. (NYSE:BXC) 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 RCAP might be a better candidate to consider a long position.