Should You Avoid Arthur J Gallagher & Co (AJG)?

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that sold off their entire stakes in the stock during the third quarter. Intriguingly, D E Shaw sold off the largest investment of the 700 funds followed by Insider Monkey, totaling an estimated $9.6 million in stock, and Renaissance Technologies was right behind this move, as the fund said goodbye to about $3.1 million worth of Arthur J Gallagher & Co (NYSE:AJG) shares.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Arthur J Gallagher & Co (NYSE:AJG) but similarly valued. We will take a look at Tractor Supply Company (NASDAQ:TSCO), Nordstrom, Inc. (NYSE:JWN), Synopsys, Inc. (NASDAQ:SNPS), and NetSuite Inc (NYSE:N). All of these stocks’ market caps are similar to AJG’s market cap.

As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $413 million. That figure was a meager $87 million in AJG’s case. Nordstrom, Inc. (NYSE:JWN) is the most popular stock in this table. On the other hand Synopsys, Inc. (NASDAQ:SNPS) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Arthur J Gallagher & Co (NYSE:AJG) is even less popular than SNPS. 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.

Disclosure: none.