Is Methode Electronics Inc. (MEI) A Good Stock To Buy?

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Since Methode Electronics Inc. (NYSE:MEI) has faced a decline in interest from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of funds that elected to cut their positions entirely last quarter. It’s worth mentioning that Richard S. Meisenberg’s ACK Asset Management cashed in the largest stake of the 700 funds watched by Insider Monkey, valued at about $10.5 million in stock. Ken Griffin’s fund, Citadel Investment Group, also dumped its stock, about $1 million worth.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Methode Electronics Inc. (NYSE:MEI) but similarly valued. We will take a look at Denbury Resources Inc. (NYSE:DNR), Apogee Enterprises, Inc. (NASDAQ:APOG), Portola Pharmaceuticals Inc (NASDAQ:PTLA), and TransAlta Corporation (USA) (NYSE:TAC). This group of stocks’ market caps resemble MEI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DNR 18 65600 -3
APOG 14 71670 1
PTLA 15 236123 -2
TAC 7 32380 -1

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $101 million. That figure was $119 million in MEI’s case. Denbury Resources Inc. (NYSE:DNR) is the most popular stock in this table. On the other hand TransAlta Corporation (USA) (NYSE:TAC) is the least popular one with only seven bullish hedge fund positions. Methode Electronics Inc. (NYSE:MEI) 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 Denbury Resources Inc. (NYSE:DNR) might be a better candidate to consider taking a long position in.

Disclosure: none

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