Is Resource America Inc (REXI) Going to Burn These Hedge Funds?

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Resource America Inc (NASDAQ:REXI) but similarly valued. We will take a look at EVINE Live Inc (NASDAQ:EVLV), Perion Network Ltd (NASDAQ:PERI), ModusLink Global Solutions, Inc. (NASDAQ:MLNK), and Harmony Merger Corp (NASDAQ:HRMN). This group of stocks’ market values are closest to REXI’s market value.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $33 million, compared to $11 million in REXI’s case. EVINE Live Inc (NASDAQ:EVLV) is the most popular stock in this table. On the other hand, Harmony Merger Corp (NASDAQ:HRMN) is the least popular one with only 4 bullish hedge fund positions. Resource America Inc (NASDAQ:REXI) 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 EVLV might be a better candidate to consider a long position.