Is Hortonworks Inc (HDP) Worthy of Your Portfolio?

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As industrywide interest jumped, key money managers have jumped into Hortonworks Inc (NASDAQ:HDP) headfirst. Portolan Capital Management, led by George McCabe, assembled the biggest position in Hortonworks Inc (NASDAQ:HDP). Portolan Capital Management had $5.9 million invested in the company at the end of the quarter. Amish Mehta’s SQN Investors also initiated a $5 million position during the quarter. The other funds with new positions in the stock are Daniel S. Och’s OZ Management, Paul Hondros’s AlphaOne Capital Partners, and Dmitry Balyasny’s Balyasny Asset Management. We should note that SQN Investors is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Let’s now review hedge fund activity in other stocks similar to Hortonworks Inc (NASDAQ:HDP). These stocks are Editas Medicine Inc (NASDAQ:EDIT), Live Oak Bancshares Inc (NASDAQ:LOB), Bristow Group Inc (NYSE:BRS), and Preferred Bank (NASDAQ:PFBC). This group of stocks’ market valuations are closest to HDP’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EDIT 10 54080 4
LOB 4 7326 -2
BRS 16 244657 3
PFBC 9 50330 0

As you can see these stocks had an average of 10 investors with bullish positions and the average amount invested in these stocks was $89 million. That figure was $91 million in HDP’s case. Bristow Group Inc (NYSE:BRS) is the most popular stock in this table. On the other hand Live Oak Bancshares Inc (NASDAQ:LOB) is the least popular one with only four bullish hedge fund positions. Hortonworks Inc (NASDAQ:HDP) 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 Bristow Group Inc (NYSE:BRS) might be a better candidate to consider taking a long position in.

Disclosure: none

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