Is Shoe Carnival, Inc. (SCVL) A Good Stock To Buy?

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Because Shoe Carnival, Inc. (NASDAQ:SCVL) has faced a lull in interest from hedge fund managers, logic holds that there lies a certain “tier” of hedgies that slashed their entire stakes in the third quarter. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the largest position of the “upper crust” of funds studied by Insider Monkey, totaling close to $2 million in stock. D E Shaw, also said goodbye to its stock, about $0.7 million worth.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Shoe Carnival, Inc. (NASDAQ:SCVL) but similarly valued. These stocks are Western Asset Emerging Mrkts Dbt Fnd Inc (NYSE:ESD), Bridge Bancorp, Inc. (NASDAQ:BDGE), OceanFirst Financial Corp. (NASDAQ:OCFC), and Universal American Corporation (NYSE:UAM). This group of stocks’ market valuations resemble SCVL’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ESD 5 9242 1
BDGE 7 66431 1
OCFC 15 79003 2
UAM 12 132332 0

As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $67 million in SCVL’s case. OceanFirst Financial Corp. (NASDAQ:OCFC) is the most popular stock in this table. On the other hand Western Asset Emerging Mrkts Dbt Fnd Inc (NYSE:ESD) is the least popular one with only 5 bullish hedge fund positions. Shoe Carnival, Inc. (NASDAQ:SCVL) 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 OCFC might be a better candidate to consider taking a long position in.

Disclosure: None


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