Should You Avoid PharMerica Corporation (PMC)?

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that dropped their entire stakes in the stock during the third quarter. Interestingly, Jeremy Green’s Redmile Group dropped the largest position of the “upper crust” of funds monitored by Insider Monkey, valued at an estimated $6.5 million in stock. Nick Niell’s fund, Arrowgrass Capital Partners, also dropped its stock, about $4.3 million worth.

Let’s check out hedge fund activity in other stocks similar to PharMerica Corporation (NYSE:PMC). These stocks are Ingles Markets, Incorporated (NASDAQ:IMKTA), Isle of Capri Casinos (NASDAQ:ISLE), Alamo Group, Inc. (NYSE:ALG), and CenterState Banks Inc (NASDAQ:CSFL). This group of stocks’ market values match PMC’s market value.

As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $120 million. That figure was $65 million in PMC’s case. Isle of Capri Casinos (NASDAQ:ISLE) is the most popular stock in this table. On the other hand Ingles Markets, Incorporated (NASDAQ:IMKTA) is the least popular one with only 10 bullish hedge fund positions. PharMerica Corporation (NYSE:PMC) 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 ISLE might be a better candidate to consider taking a long position in.

Disclosure: None