Should You Avoid American States Water Co (AWR)?

Since American States Water Co (NYSE:AWR) has experienced a slightly bearish sentiment from hedge fund managers, it’s safe to say that there were a few funds that slashed their full holdings last quarter. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the biggest stake of all the hedgies watched by Insider Monkey, totaling an estimated $1.8 million in stock. Israel Englander’s fund, Millennium Management, also sold off its holding, about $0.9 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 2 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to American States Water Co (NYSE:AWR). We will take a look at Greif, Inc. (NYSE:GEF), ABM Industries, Inc. (NYSE:ABM), China Lodging Group, Ltd (ADR) (NASDAQ:HTHT), and M/A-COM Technology Solutions Holdings (NASDAQ:MTSI). This group of stocks’ market valuations are closest to AWR’s market valuation.

As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $82 million. That figure was $44 million in AWR’s case. Greif, Inc. (NYSE:GEF) is the most popular stock in this table. On the other hand M/A-COM Technology Solutions Holdings (NASDAQ:MTSI) is the least popular one with only nine bullish hedge fund positions. Compared to these stocks American States Water Co (NYSE:AWR) is even less popular than MTSI. 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.