Should You Avoid Eldorado Gold Corp (USA) (EGO)?

Judging by the fact that Eldorado Gold Corp (USA) (NYSE:EGO) has witnessed declining sentiment from hedge fund managers, it’s easy to see that there exists a select few funds that elected to cut their entire stakes heading into Q4. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the biggest position of all the hedgies watched by Insider Monkey, valued at about $0.2 million in stock. Jacob Gottlieb’s fund, Visium Asset Management, also sold off its stock, about $0.1 million worth. These transactions are interesting, as total hedge fund interest fell by 1 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Eldorado Gold Corp (USA) (NYSE:EGO) but similarly valued. We will take a look at RLI Corp. (NYSE:RLI), Medical Properties Trust, Inc. (NYSE:MPW), Gerdau SA (ADR) (NYSE:GGB), and Genworth Financial Inc (NYSE:GNW). All of these stocks’ market caps are closest to EGO’s market cap.

As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $116 million. That figure was $55 million in EGO’s case. Genworth Financial Inc (NYSE:GNW) is the most popular stock in this table. On the other hand Medical Properties Trust, Inc. (NYSE:MPW) is the least popular one with only 10 bullish hedge fund positions. Eldorado Gold Corp (USA) (NYSE:EGO) 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 GNW might be a better candidate to consider a long position.