Is Potbelly Corp (PBPB) A Good Stock To Buy?

Judging by the fact that Potbelly Corp (NASDAQ:PBPB) has sustained a decline in interest from hedge fund managers, logic holds that there were a few hedgies that decided to sell off their full holdings last quarter. At the top of the heap, Sahm Adrangi’s Kerrisdale Capital dumped the largest position of the 700 funds studied by Insider Monkey, valued at close to $1.2 million in stock, and Peter Muller’s PDT Partners was right behind this move, as the fund sold off about $0.4 million worth of shares.

Let’s now take a look at hedge fund activity in other stocks similar to Potbelly Corp (NASDAQ:PBPB). These stocks are NewLink Genetics Corp (NASDAQ:NLNK), Versartic Inc (NASDAQ:VSAR), Casella Waste Systems Inc. (NASDAQ:CWST), and NMI Holdings Inc (NASDAQ:NMIH). This group of stocks’ market valuations match PBPB’s market valuation.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $106 million. That figure was $35 million in PBPB’s case. NMI Holdings Inc (NASDAQ:NMIH) is the most popular stock in this table. On the other hand NewLink Genetics Corp (NASDAQ:NLNK) is the least popular one with only 12 bullish hedge fund positions. Potbelly Corp (NASDAQ:PBPB) 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 NMIH might be a better candidate to consider taking a long position in.

Disclosure: None