Should You Avoid Aetna Inc. (AET)?

Since Aetna Inc. (NYSE:AET) has faced falling interest from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of hedgies that decided to sell off their entire stakes in the third quarter. Interestingly, Matthew Halbower’s Pentwater Capital Management sold off the largest stake of the 700 funds watched by Insider Monkey, totaling close to $214.1 million in stock. Leon Cooperman’s fund, Omega Advisors, also said goodbye to its stock, about $49.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 10 funds in the third quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Aetna Inc. (NYSE:AET) but similarly valued. These stocks are ASML Holding N.V. (ADR) (NASDAQ:ASML), Paypal Holdings Inc (NASDAQ:PYPL), Charles Schwab Corp (NYSE:SCHW), and Liberty Global Inc. (NASDAQ:LBTYA). This group of stocks’ market valuations resemble AET’s market valuation.

As you can see these stocks had an average of 52 hedge funds with bullish positions and the average amount invested in these stocks was $2,592 million. That figure was $4,588 million in AET’s case. Paypal Holdings Inc (NASDAQ:PYPL) is the most popular stock in this table. On the other hand ASML Holding N.V. (ADR) (NASDAQ:ASML) is the least popular one with only 9 bullish hedge fund positions. Aetna Inc. (NYSE:AET) 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, PYPL might be a better candidate to consider a long position.