Is Potbelly Corp (PBPB) Going to Burn These Hedge Funds?

Judging by the fact that Potbelly Corp (NASDAQ:PBPB) has experienced falling interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few fund managers that elected to cut their full holdings heading into Q4. It’s worth mentioning that Alexander Mitchell’s Scopus Asset Management sold off the biggest investment of all the hedgies monitored by Insider Monkey, worth close to $3.1 million in stock, and D. E. Shaw’s D E Shaw was right behind this move, as the fund dumped about $0.5 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 4 funds heading into Q4.

Let’s check out hedge fund activity in other stocks similar to Potbelly Corp (NASDAQ:PBPB). We will take a look at Zogenix, Inc. (NASDAQ:ZGNX), Comtech Telecomm. Corp. (NASDAQ:CMTL), Cardionet Inc (NASDAQ:BEAT), and First Community Bancshares Inc (NASDAQ:FCBC). All of these stocks’ market caps are closest to PBPB’s market cap.

As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $73 million. That figure was $35 million in PBPB’s case. Zogenix, Inc. (NASDAQ:ZGNX) is the most popular stock in this table, while the least popular one is First Community Bancshares Inc (NASDAQ:FCBC)) with only 6 bullish hedge fund positions. Even though Potbelly Corp (NASDAQ:PBPB) is not the least popular stock in this group it has not attracted much attention from investors. This is may imply that it is not a good stock to buy, and we’d rather spend our time researching stocks that hedge funds are piling on. In this case ZGNX might be a better candidate to consider a long position.