Is Williams-Sonoma, Inc. (WSM) Going to Burn These Hedge Funds?

Due to the fact that Williams-Sonoma, Inc. (NYSE:WSM) has witnessed declining sentiment from hedge fund managers, it’s easy to see that there was a specific group of money managers that elected to cut their full holdings last quarter. At the top of the heap, Gabriel Plotkin’s Melvin Capital Management dumped the largest stake of all the hedgies tracked by Insider Monkey, comprising about $44 million in stock, and Dmitry Balyasny of Balyasny Asset Management was right behind this move, as the fund dumped about $37.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 1 funds last quarter.

Let’s check out hedge fund activity in other stocks similar to Williams-Sonoma, Inc. (NYSE:WSM). These stocks are Plum Creek Timber Co. Inc. (NYSE:PCL), Franco-Nevada Corporation (NYSE:FNV), DexCom, Inc. (NASDAQ:DXCM), and Robert Half International Inc. (NYSE:RHI) (we intentionally didn’t limit our peer group to the companies in the same industry). This group of stocks’ market caps resemble WSM’s market cap.

As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $420 million. DexCom, Inc. (NASDAQ:DXCM) is the most popular stock in this table. On the other hand Franco-Nevada Corporation (NYSE:FNV) is the least popular one with only 15 bullish hedge fund positions. Williams-Sonoma, Inc. (NYSE:WSM) 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 DXCM might be a better candidate to consider a long position.