Should You Avoid Nuverra Environmental Solutions Inc (NES)?

Because Nuverra Environmental Solutions Inc (NYSE:NES) has witnessed declining sentiment from the smart money, logic holds that there were a few fund managers who were dropping their full holdings heading into Q4. Interestingly, Israel Englander’s Millennium Management said goodbye to the biggest position of the 700 funds followed by Insider Monkey, worth an estimated $0.2 million in stock, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners was right behind this move, as the fund sold off about $0.1 million worth. These transactions are important to note, as total hedge fund interest dropped by 2 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks similar to Nuverra Environmental Solutions Inc (NYSE:NES). We will take a look at Penn Virginia Corporation (NYSE:PVA), ImmunoCellular Therapeutics Ltd (NYSEMKT:IMUC), Rand Logistics, Inc. (NASDAQ:RLOG), and Identive Group, Inc. (NASDAQ:INVE). This group of stocks’ market caps are closest to NES’s market cap.

As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $3 million in NES’s case. Penn Virginia Corporation (NYSE:PVA) is the most popular stock in this table. On the other hand ImmunoCellular Therapeutics Ltd (NYSEMKT:IMUC) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Nuverra Environmental Solutions Inc (NYSE:NES) is as less popular as IMUC. 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.