Is Christopher & Banks Corporation (CBK) Going to Burn These Hedge Funds?

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Due to the fact that Christopher & Banks Corporation (NYSE:CBK) has faced a falling interest from the smart money, logic holds that there lies a certain “tier” of money managers that slashed their entire stakes in the third quarter. Interestingly, Chuck Royce’s Royce & Associates dumped the biggest position of all the hedgies tracked by Insider Monkey, valued at an estimated $1.4 million in stock. Mark N. Diker’s fund, Diker Management, also said goodbye to its stock, about $0.6 million worth of shares. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 5 funds in the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Christopher & Banks Corporation (NYSE:CBK) but similarly valued. These stocks are Cinedigm Corp (NASDAQ:CIDM), Northern Dynasty Minerals Ltd. (USA) (NYSEMKT:NAK), Smith Micro Software, Inc. (NASDAQ:SMSI), and the First Marblehead Corporation (NYSE:FMD). This group of stocks’ market valuations match Christopher & Banks Corporation (NYSE:CBK)’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CIDM 8 2168 -4
NAK 4 2352 0
SMSI 5 5195 1
FMD 4 4393 -2

As you can see, these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $3 million in Christopher & Banks Corporation (NYSE:CBK)’s case. Cinedigm Corp (NASDAQ:CIDM) is the most popular stock in this table. On the other hand, Northern Dynasty Minerals Ltd. (USA) (NYSEMKT:NAK) is the least popular one with only 4 bullish hedge fund positions. Christopher & Banks Corporation (NYSE:CBK) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Cinedigm Corp (NASDAQ:CIDM) might be a better candidate to consider a long position.

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