Is King Digital Entertainment PLC (KING) A Good Stock To Buy?

Judging by the fact that King Digital Entertainment PLC (NYSE:KING) has witnessed a declination in interest from the smart money, logic holds that there is a sect of hedge funds that elected to cut their positions entirely last quarter. Intriguingly, Robert Pitts’s Steadfast Capital Management dumped the biggest stake of all the hedgies watched by Insider Monkey, worth an estimated $36.9 million in stock. Josh Resnick’s fund, Jericho Capital Asset Management, also cut its stock, about $12.2 million worth. These moves are important to note, as aggregate hedge fund interest fell by 6 funds last quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as King Digital Entertainment PLC (NYSE:KING) but similarly valued. These stocks are Orbital ATK Inc (NYSE:OA), ICON plc – Ordinary Shares (NASDAQ:ICLR), Core Laboratories N.V. (NYSE:CLB), and Commerce Bancshares, Inc. (NASDAQ:CBSH). All of these stocks’ market caps are similar to KING’s market cap.

As you can see these stocks had an average of 22.75 hedge funds with bullish positions and the average amount invested in these stocks was $294 million. That figure was $304 million in KING’s case. Orbital ATK Inc (NYSE:OA) is the most popular stock in this table. On the other hand Commerce Bancshares, Inc. (NASDAQ:CBSH) is the least popular one with only 10 bullish hedge fund positions. King Digital Entertainment PLC (NYSE:KING) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard OA might be a better candidate to consider a long position.