Is E*TRADE Financial Corp (ETFC) A Good Stock To Buy?

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Judging by the fact that E*TRADE Financial Corp (NASDAQ:ETFC) has encountered a decline in interest from the aggregate hedge fund industry, we can see that there is a sect of funds that slashed their positions entirely heading into Q4. It’s worth mentioning that Jacob Gottlieb’s Visium Asset Management said goodbye to the biggest investment of the “upper crust” of funds followed by Insider Monkey, totaling an estimated $9.3 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also dropped its call options, about $5.6 million worth of ETFC shares.

Let’s go over hedge fund activity in other stocks similar to E*TRADE Financial Corp (NASDAQ:ETFC). These stocks are Everest Re Group Ltd (NYSE:RE), Msci Inc (NYSE:MSCI), Michael Kors Holdings Ltd (NYSE:KORS), and Coty Inc (NYSE:COTY). This group of stocks’ market caps resemble ETFC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RE 18 656448 -4
MSCI 24 349907 1
KORS 31 583806 2
COTY 46 3034196 33

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 $1.16 billion. That figure was $1.08 billion in ETFC’s case. Coty Inc (NYSE:COTY) is the most popular stock in this table. On the other hand Everest Re Group Ltd (NYSE:RE) is the least popular one with only 18 bullish hedge fund positions. E*TRADE Financial Corp (NASDAQ:ETFC) 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 COTY might be a better candidate to consider taking a long position in.

Disclosure: none.

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