Is Consolidated Communications Holdings Inc (CNSL) A Good Stock To Buy?

We view hedge fund activity in Consolidated Communications Holdings Inc (NASDAQ:CNSL) unfavorable, but in this case there was only a single hedge fund selling its entire position: Hutchin Hill Capital. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Two Sigma Advisors).

Let’s now review hedge fund activity in other stocks similar to Consolidated Communications Holdings Inc (NASDAQ:CNSL). We will take a look at Builders FirstSource, Inc. (NASDAQ:BLDR), TopBuild Corp (NYSE:BLD), Emergent Biosolutions Inc (NYSE:EBS), and Pacira Pharmaceuticals Inc (NASDAQ:PCRX). This group of stocks’ market values are closest to CNSL’s market value.

As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $256 million. That figure was $3 million in CNSL’s case. Builders FirstSource, Inc. (NASDAQ:BLDR) is the most popular stock in this table. On the other hand Emergent Biosolutions Inc (NYSE:EBS) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Consolidated Communications Holdings Inc (NASDAQ:CNSL) is even less popular than EBS. 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.