Is Rosetta Stone Inc (RST) A Good Stock To Buy?

Because Rosetta Stone Inc (NYSE:RST) has experienced a decline in interest from the smart money, logic holds that there lies a certain “tier” of money managers who sold off their positions entirely by the end of the third quarter. Intriguingly, Bruce Salomon’s Elberon Capital dumped the largest investment of the 700 funds watched by Insider Monkey, worth an estimated $2.5 million in stock. John H Lewis’ fund, Osmium Partners, also sold off its call options, about $0.2 million worth.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Rosetta Stone Inc (NYSE:RST) but similarly valued. These stocks are Planet Payment Inc (NASDAQ:PLPM), Graham Corporation (NYSEAMEX:GHM), Veritex Holdings Inc (NASDAQ:VBTX), and Alliance One International, Inc. (NYSE:AOI). This group of stocks’ market caps are closest to RST’s market cap.

As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $21 million. That figure was $94 million in RST’s case. Planet Payment Inc (NASDAQ:PLPM) is the most popular stock in this table. On the other hand Alliance One International, Inc. (NYSE:AOI) is the least popular one with only 5 bullish hedge fund positions. Rosetta Stone Inc (NYSE:RST) is tied as the most popular stock in this group and the most money invested in it. This is a positive signal, as we’d rather spend our time researching stocks that hedge funds are overweight. In this regard RST might be a good candidate to consider taking a long position in.

Disclosure: None