Should You Avoid Chemtura Corp (CHMT)?

Seeing as Chemtura Corp (NYSE:CHMT) has faced declining sentiment from hedge fund managers, it’s easy to see that there was a specific group of hedgies who were dropping their positions entirely last quarter. Interestingly, Jim Simons’ Renaissance Technologies dumped the biggest position of the “upper crust” of funds followed by Insider Monkey, valued at an estimated $9.6 million in stock. George McCabe’s fund, Portolan Capital Management, also sold off its stock, about $6.2 million worth. These moves are interesting, as total hedge fund interest dropped by 2 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Chemtura Corp (NYSE:CHMT). We will take a look at On Assignment, Inc. (NYSE:ASGN), Demandware Inc (NYSE:DWRE), The Advisory Board Company (NASDAQ:ABCO), and SemGroup Corp (NYSE:SEMG). This group of stocks’ market values resemble CHMT’s market value.

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 $192 million, compared to $437 million in CHMT’s case. SemGroup Corp (NYSE:SEMG) is the most popular stock in this table. On the other hand The Advisory Board Company (NASDAQ:ABCO) is the least popular one with only 11 bullish hedge fund positions. Chemtura Corp (NYSE:CHMT) 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 SEMG might be a better candidate to consider a long position.