Is Controladora Vuela Co Avcn SA CV (ADR) (VLRS) Going to Burn These Hedge Funds?

As industry-wide interest jumped, some big names have jumped into Controladora Vuela Co Avcn SA CV (ADR) (NYSE:VLRS) headfirst. Marshall Wace LLP, led by Paul Marshall and Ian Wace, created the most valuable position in Controladora Vuela Co Avcn SA CV (ADR) (NYSE:VLRS). Marshall Wace LLP had $4 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $0.6 million investment in the stock during the quarter. The following funds were also among the new VLRS investors: Ken Griffin’s Citadel Investment Group and Matthew Tewksbury’s Stevens Capital Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Controladora Vuela Co Avcn SA CV (ADR) (NYSE:VLRS) but similarly valued. We will take a look at Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD), Finisar Corporation (NASDAQ:FNSR), KBR, Inc. (NYSE:KBR), and Groupon Inc (NASDAQ:GRPN). All of these stocks’ market caps are similar to VLRS’s market cap.

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $407 million. That figure was $175 million in VLRS’s case. KBR, Inc. (NYSE:KBR) is the most popular stock in this table. On the other hand Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Controladora Vuela Co Avcn SA CV (ADR) (NYSE:VLRS) is even less popular than IRWD. 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