Is Royal Bank of Canada (USA) (RY) A Good Stock To Buy?

Due to the fact that Royal Bank of Canada (USA) (NYSE:RY) has experienced falling interest from the smart money, it’s easy to see that there was a specific group of funds who sold off their positions entirely in the third quarter. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the largest position of the 700 funds tracked by Insider Monkey, totaling about $10.8 million in stock. Peter Muller’s fund, PDT Partners, also cut its stock, about $2.6 million worth. These moves are important to note, as total hedge fund interest dropped by 4 funds in the third quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Royal Bank of Canada (USA) (NYSE:RY) but similarly valued. We will take a look at United Technologies Corporation (NYSE:UTX), SAP AG (ADR) (NYSE:SAP), Ambev SA (ADR) (NYSE:ABEV), and Union Pacific Corporation (NYSE:UNP). This group of stocks’ market valuations is closest to Royal Bank of Canada (USA) (NYSE:RY)’s market valuation.

As you can see, these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $1.32 billion. That figure was $504 million in Royal Bank of Canada (USA) (NYSE:RY)’s case. Union Pacific Corporation (NYSE:UNP) is the most popular stock in this table. On the other hand, SAP AG (ADR) (NYSE:SAP) is the least popular one with only 11 bullish hedge fund positions. Royal Bank of Canada (USA) (NYSE:RY) 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, Union Pacific Corporation (NYSE:UNP) might be a better candidate to consider a long position.