Should You Avoid OneBeacon Insurance Group, Ltd. (OB)?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Springbok Capital. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 700+ hedge funds tracked by Insider Monkey identified OB as a viable investment and initiated a position in the stock.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as OneBeacon Insurance Group, Ltd. (NYSE:OB) but similarly valued. We will take a look at Cvent Inc (NYSE:CVT), Knight Capital Group Inc. (NYSE:KCG), Mobile Mini Inc (NASDAQ:MINI), and Otter Tail Corporation (NASDAQ:OTTR). This group of stocks’ market values match OB’s market value.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $19 million in OB’s case. Cvent Inc (NYSE:CVT) is the most popular stock in this table. On the other hand Mobile Mini Inc (NASDAQ:MINI) is the least popular one with only 8 bullish hedge fund positions. OneBeacon Insurance Group, Ltd. (NYSE:OB) 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 CVT might be a better candidate to consider taking a long position in.

Disclosure: None