Is Shake Shack Inc (SHAK) A Good Stock To Buy According To Hedge Funds?

Due to the fact that Shake Shack Inc (NYSE:SHAK) has experienced falling interest from the smart money, logic holds that there exists a select few hedge funds that decided to sell off their full holdings in the third quarter. Interestingly, Edmond M. Safra’s EMS Capital cashed in the biggest position of the 700 funds tracked by Insider Monkey, totaling about $15.3 million in stock, and D. E. Shaw’s D E Shaw, one of the largest hedge funds in the world, was right behind this move, as the fund dropped about $6.7 million worth of shares.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Shake Shack Inc (NYSE:SHAK) but similarly valued. We will take a look at Stratasys, Ltd. (NASDAQ:SSYS), Cempra Inc (NASDAQ:CEMP), Adams Diversified Equity Fund Inc (NYSE:ADX), and Headwaters Inc (NYSE:HW). This group of stocks’ market caps are closest to SHAK’s market cap.

As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $100 million. That figure was $86 million in SHAK’s case. Headwaters Inc (NYSE:HW) is the most popular stock in this table. On the other hand Adams Diversified Equity Fund Inc (NYSE:ADX) is the least popular one with only 4 bullish hedge fund positions. Shake Shack Inc (NYSE:SHAK) 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 HW might be a better candidate to consider taking a long position in.

Disclosure: None