Is Brown & Brown, Inc. (BRO) Going to Burn These Hedge Funds?

Since Brown & Brown, Inc. (NYSE:BRO) has faced falling interest from the aggregate hedge fund industry, we can see that there is a sect of hedgies who were dropping their entire stakes last quarter. Intriguingly, Greg Poole’s Echo Street Capital Management said goodbye to the largest investment of the 700 funds watched by Insider Monkey, worth about $5 million in stock, and John Overdeck and David Siegel’s Two Sigma Advisors was right behind this move, as the fund cut about $4 million worth. These moves are interesting, as total hedge fund interest was cut by 1 funds last quarter.

Let’s check out hedge fund activity in other stocks similar to Brown & Brown, Inc. (NYSE:BRO). These stocks are GameStop Corp. (NYSE:GME), Jabil Circuit, Inc. (NYSE:JBL), Six Flags Entertainment Corp (NYSE:SIX). This group of stocks’ market valuations resemble BRO’s market valuation.

As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $588 million. That figure was $497 million in BRO’s case. GameStop Corp. (NYSE:GME) is the most popular stock in this table, while Six Flags Entertainment Corp (NYSE:SIX) is the least popular one. Compared to these stocks, hedge funds display much less interest in Brown & Brown, Inc. (NYSE:BRO) and considering that hedge funds aren’t fond of this stock in relation to other companies mentioned 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.