Is USG Corporation (USG) A Good Stock To Buy?

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Judging by the fact that USG Corporation (NYSE:USG) has witnessed a declination in interest from the smart money, we can see that there was a specific group of fund managers that elected to cut their entire stakes by the end of the third quarter. At the top of the heap, Jeffrey Gates’ Gates Capital Management cut the largest stake of the “upper crust” of funds watched by Insider Monkey, totaling an estimated $43.3 million in call options. Andrew Sandler’s fund, Sandler Capital Management, also dropped its call options, about $9.7 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 1 funds by the end of the third quarter.

Let’s go over hedge fund activity in other stocks similar to USG Corporation (NYSE:USG). We will take a look at The Toro Company (NYSE:TTC), Hospitality Properties Trust (NYSE:HPT), Graco Inc. (NYSE:GGG), and NCR Corporation (NYSE:NCR). This group of stocks’ market values are similar to USG’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TTC 21 184000 -1
HPT 17 77923 1
GGG 16 154015 7
NCR 42 1017246 -2

As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $358 million. That figure was $1221 million in USG’s case. NCR Corporation (NYSE:NCR) is the most popular stock in this table. On the other hand Graco Inc. (NYSE:GGG) is the least popular one with only 16 bullish hedge fund positions. USG Corporation (NYSE:USG) 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 NCR might be a better candidate to consider a long position.

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