Salem Media Group Inc (SALM): Hedge Fund Sentiment Unchanged

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: LMR Partners. 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 here 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 Algert Coldiron Investors).

Let’s now take a look at hedge fund activity in other stocks similar to Salem Media Group Inc (NASDAQ:SALM). We will take a look at Xcel Brands Inc (NASDAQ:XELB), Emergent Capital Inc (NYSE:EMG), Gulf Island Fabrication, Inc. (NASDAQ:GIFI), and Fate Therapeutics Inc (NASDAQ:FATE). This group of stocks’ market values resembles Salem Media Group Inc (NASDAQ:SALM)’s market value.

As you can see, these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $10 million in Salem Media Group Inc (NASDAQ:SALM)’s case. Gulf Island Fabrication, Inc. (NASDAQ:GIFI) is the most popular stock in this table. On the other hand, Xcel Brands Inc (NASDAQ:XELB) is the least popular one with only 4 bullish hedge fund positions. Salem Media Group Inc (NASDAQ:SALM) 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, Gulf Island Fabrication, Inc. (NASDAQ:GIFI) might be a better candidate to consider a long position.