Northwest Natural Gas Co (NWN): Are Hedge Funds Right About This Stock?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Tudor Investment Corp. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was D E Shaw).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Northwest Natural Gas Co (NYSE:NWN) but similarly valued. We will take a look at Stillwater Mining Company (NYSE:SWC), AZZ Incorporated (NYSE:AZZ), Zeltiq Aesthetics Inc (NASDAQ:ZLTQ), and Cambrex Corporation (NYSE:CBM). This group of stocks’ market values are closest to NWN’s market value.

As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $164 million. That figure was $22 million in NWN’s case. Zeltiq Aesthetics Inc (NASDAQ:ZLTQ) is the most popular stock in this table. On the other hand AZZ Incorporated (NYSE:AZZ) is the least popular one with only 7 bullish hedge fund positions. Northwest Natural Gas Co (NYSE:NWN) 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 ZLTQ might be a better candidate to consider a long position.