Is BRF SA (ADR) (BRFS) a Good Stock to Buy?

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that cut their entire stakes in the stock during the third quarter. It’s worth mentioning that Howard Marks’ Oaktree Capital Management cut the largest investment of the 700 funds studied by Insider Monkey, comprising an estimated $27.3 million in stock. Highbridge Capital Management, also cut its stock, about $0.2 million worth.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as BRF SA (ADR) (NYSE:BRFS) but similarly valued. These stocks are W.W. Grainger, Inc. (NYSE:GWW), Check Point Software Technologies Ltd. (NASDAQ:CHKP), Spectra Energy Partners, LP (NYSE:SEP), and Marathon Oil Corporation (NYSE:MRO). All of these stocks’ market caps resemble BRFS’s market cap.

As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $367 million. That figure was $172 million in BRFS’s case. Check Point Software Technologies Ltd. (NASDAQ:CHKP) is the most popular stock in this table. On the other hand Spectra Energy Partners, LP (NYSE:SEP) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks BRF SA (ADR) (NYSE:BRFS) is even less popular than SEP. 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.

Disclosure: None