Is Steel Partners Holdings LP (SPLP) A Good Stock To Buy According To Other Hedge Funds?

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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 now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Steel Partners Holdings LP (NYSE:SPLP) but similarly valued. These stocks are Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI), Heska Corp (NASDAQ:HSKA), Peapack-Gladstone Financial Corp (NASDAQ:PGC), and China Cord Blood Corp (NYSE:CO). This group of stocks’ market values are similar to SPLP’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SPPI 11 40022 -3
HSKA 11 32670 -1
PGC 10 77552 -2
CO 5 15329 0

As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $33 million in SPLP’s case. Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) is the most popular stock in this table. On the other hand China Cord Blood Corp (NYSE:CO) is the least popular one with only 5 bullish hedge fund positions. Steel Partners Holdings LP (NYSE:SPLP) 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 SPPI might be a better candidate to consider taking a long position in.

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