Is Sally Beauty Holdings, Inc. (SBH) A Good Stock To Buy?

Since Sally Beauty Holdings, Inc. (NYSE:SBH) has encountered a decline in interest from the smart money, logic holds that there was a specific group of fund managers that elected to cut their entire stakes heading into Q4. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management dumped the largest investment of the “upper crust” of funds studied by Insider Monkey, comprising an estimated $20 million in stock, and John Overdeck and David Siegel’s Two Sigma Advisors was right behind this move, as the fund dropped about $7.7 million worth of shares.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Sally Beauty Holdings, Inc. (NYSE:SBH) but similarly valued. We will take a look at Realogy Holdings Corp (NYSE:RLGY), Alere Inc (NYSE:ALR), First Hawaiian Inc (NASDAQ:FHB), and Endesa Americas SA – ADR (NYSE:EOCA). This group of stocks’ market valuations resemble SBH’s market valuation.

As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $620 million. That figure was $116 million in SBH’s case. Alere Inc (NYSE:ALR) is the most popular stock in this table. On the other hand Endesa Americas SA – ADR (NYSE:EOCA) is the least popular one with only 4 bullish hedge fund positions. Sally Beauty Holdings, Inc. (NYSE:SBH) 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 ALR might be a better candidate to consider taking a long position in.

Disclosure: None