Is Sanderson Farms, Inc. (SAFM) A Good Stock To Buy Right Now?

With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Gotham Asset Management, managed by Joel Greenblatt, created the biggest position in Sanderson Farms, Inc. (NASDAQ:SAFM). Gotham Asset Management had $6.6 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $2.7 million position during the quarter. The other funds with brand new SAFM positions are Ken Griffin’s Citadel Investment Group, Malcolm Fairbairn’s Ascend Capital, and Jamie Mendola’s Pacific Grove Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Sanderson Farms, Inc. (NASDAQ:SAFM) but similarly valued. We will take a look at Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY), Qunar Cayman Islands Ltd (NASDAQ:QUNR), NOW Inc (NYSE:DNOW), and The New York Times Company (NYSE:NYT). This group of stocks’ market values resemble SAFM’s market value.

As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $232 million. That figure was $202 million in SAFM’s case. Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) is the most popular stock in this table. On the other hand Qunar Cayman Islands Ltd (NASDAQ:QUNR) is the least popular one with only 7 bullish hedge fund positions. Sanderson Farms, Inc. (NASDAQ:SAFM) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PLAY might be a better candidate to consider a long position.