Should You Avoid Sun Life Financial Inc. (SLF)?

Since Sun Life Financial Inc. (NYSE:SLF) has experienced declining sentiment from the smart money, logic holds that there was a specific group of funds who sold off their positions entirely last quarter. Intriguingly, Lawrence Sapanski’s Scoria Capital sold off the largest stake of the “upper crust” of funds tracked by Insider Monkey, totaling an estimated $14.6 million in stock, and Lawrence Sapanski’s Scoria Capital was right behind this move, as the fund said goodbye to about $9.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 3 funds last quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Sun Life Financial Inc. (NYSE:SLF) but similarly valued. These stocks are Moody’s Corporation (NYSE:MCO), SunTrust Banks, Inc. (NYSE:STI), Magna International Inc. (NYSE:MGA), and Royal Caribbean Cruises Ltd. (NYSE:RCL). This group of stocks’ market values resemble SLF’s market value.

As you can see these stocks had an average of 40 hedge funds with bullish positions and the average amount invested in these stocks was $1,625 million. That figure was $77 million in SLF’s case. SunTrust Banks, Inc. (NYSE:STI) is the most popular stock in this table. On the other hand Moody’s Corporation (NYSE:MCO) is the least popular one with only 31 bullish hedge fund positions. Compared to these stocks Sun Life Financial Inc. (NYSE:SLF) is even less popular than MCO. 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.