Should You Avoid PDF Solutions, Inc. (PDFS)?

Since PDF Solutions, Inc. (NASDAQ:PDFS) has sustained declining sentiment from the entirety of the hedge funds we track, we can see that there exists a select few money managers who were dropping their entire stakes in the third quarter. It’s worth mentioning that Spencer M. Waxman’s Shannon River Fund Management cashed in the biggest investment of the “upper crust” of funds tracked by Insider Monkey, valued at close to $7.1 million in stock. Robert B. Gillam’s fund, McKinley Capital Management, also dumped its stock, about $2.4 million worth.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as PDF Solutions, Inc. (NASDAQ:PDFS) but similarly valued. We will take a look at SP Plus Corp (NASDAQ:SP), K12 Inc. (NYSE:LRN), Kforce Inc. (NASDAQ:KFRC), and Kadant Inc. (NYSE:KAI). This group of stocks’ market caps are closest to PDFS’s market cap.

As you can see these stocks had an average of 12 investors with bullish positions and the average amount invested in these stocks was $45 million. That figure was $89 million in PDFS’s case. K12 Inc. (NYSE:LRN) is the most popular stock in this table, while Kforce Inc. (NASDAQ:KFRC) is the least popular one with only eight bullish hedge fund positions. PDF Solutions, Inc. (NASDAQ:PDFS) 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 LRN might be a better candidate to consider taking a long position in.

Disclosure: none