Is Shore Bancshares, Inc. (SHBI) Going to Burn These Hedge Funds?

Earlier, we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Shore Bancshares, Inc. (NASDAQ:SHBI) but similarly valued. These stocks are Farmland Partners Inc (NYSE:FPI), Travelzoo Inc. (NASDAQ:TZOO), Fortress Biotech Inc (NASDAQ:FBIO), and Independence Contract Drilling Inc (NYSE:ICD). All of these stocks’ market caps are closest to Shore Bancshares, Inc. (NASDAQ:SHBI)’s market cap.

As you can see, these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $11 million in Shore Bancshares, Inc. (NASDAQ:SHBI)’s case. Travelzoo Inc. (NASDAQ:TZOO) is the most popular stock in this table. On the other hand, Farmland Partners Inc (NYSE:FPI) is the least popular one with only 4 bullish hedge fund positions. Shore Bancshares, Inc. (NASDAQ:SHBI) 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, Travelzoo Inc. (NASDAQ:TZOO) might be a better candidate to consider a long position.