Is Exa Corp (EXA) A Good Stock To Buy?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: PEAK6 Capital Management. 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 none of the 700+ hedge funds tracked by Insider Monkey identified EXA as a viable investment and initiated a position in the stock.

Let’s check out hedge fund activity in other stocks similar to Exa Corp (NASDAQ:EXA). We will take a look at ASA Gold and Precious Metals Ltd (NYSE:ASA), Gaiam, Inc. (NASDAQ:GAIA), Blue Capital Reinsurance Holdings Ltd (NYSE:BCRH), and NV5 Holdings Inc (NASDAQ:NVEE). This group of stocks’ market values match EXA’s market value.

As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $20 million in EXA’s case. Gaiam, Inc. (NASDAQ:GAIA) is the most popular stock in this table. On the other hand ASA Gold and Precious Metals Ltd (NYSE:ASA) is the least popular one with only 4 bullish hedge fund positions. Exa Corp (NASDAQ:EXA) 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 GAIA might be a better candidate to consider a long position.