Should You Avoid Pegasystems Inc. (PEGA)?

Since Pegasystems Inc. (NASDAQ:PEGA) has faced bearish sentiment from the aggregate hedge fund industry, logic holds that there exists a select few hedgies that decided to sell off their entire stakes heading into Q4. It’s worth mentioning that Israel Englander’s Millennium Management dropped the biggest position of the “upper crust” of funds tracked by Insider Monkey, comprising about $4.5 million in stock, and Joel Greenblatt’s Gotham Asset Management was right behind this move, as the fund dropped about $2.3 million worth of shares.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Pegasystems Inc. (NASDAQ:PEGA) but similarly valued. We will take a look at Pinnacle Financial Partners (NASDAQ:PNFP), Monro Muffler Brake Inc (NASDAQ:MNRO), Sterling Bancorp (NYSE:STL), and VeriFone Systems Inc (NYSE:PAY). All of these stocks’ market caps resemble PEGA’s market cap.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $106 million. That figure was $223 million in PEGA’s case. VeriFone Systems Inc (NYSE:PAY) is the most popular stock in this table. On the other hand Pinnacle Financial Partners (NASDAQ:PNFP) is the least popular one with only 10 bullish hedge fund positions. Pegasystems Inc. (NASDAQ:PEGA) 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 PAY might be a better candidate to consider taking a long position in.

Disclosure: None