Should You Buy Altra Industrial Motion Corp (AIMC)?

Judging by the fact that Altra Industrial Motion Corp (NASDAQ:AIMC) has faced bearish sentiment from hedge fund managers, it’s easy to see that there was a specific group of hedgies that slashed their entire stakes by the end of the third quarter. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors said goodbye to the largest investment of the “upper crust” of funds followed by Insider Monkey, valued at about $1.2 million in stock, and Peter Muller’s PDT Partners was right behind this move, as the fund sold off about $0.3 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks similar to Altra Industrial Motion Corp (NASDAQ:AIMC). We will take a look at CTS Corporation (NYSE:CTS), Bojangles Inc (NASDAQ:BOJA) and Strayer Education Inc (NASDAQ:STRA). This group of stocks’ market caps are similar to AIMC’s market cap.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was $20 million in AIMC’s case. Strayer Education Inc (NASDAQ:STRA) is the most popular stock in this table, while CTS Corporation (NYSE:CTS) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Altra Industrial Motion Corp (NASDAQ:AIMC) is even less popular than CTS. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.