Should You Avoid VeriFone Systems Inc (PAY)?

We already know that not all hedge funds are bullish on the stock and some hedge funds actually dumped their positions entirely. At the top of the heap, Paul Singer’s Elliott Management dumped the biggest position of the 700 funds monitored by Insider Monkey, worth an estimated $55.9 million in call options. Daniel S. Och’s fund, OZ Management, also cut its call options, about $9.3 million worth.

Let’s also examine hedge fund activity in other stocks similar to VeriFone Systems Inc (NYSE:PAY). These stocks are ABM Industries, Inc. (NYSE:ABM), Entegris Inc (NASDAQ:ENTG), Platform Specialty Products Corp (NYSE:PAH), and Silicon Laboratories (NASDAQ:SLAB). This group of stocks’ market values resemble PAY’s market value.

As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $407 million. That figure was $109 million in PAY’s case. Platform Specialty Products Corp (NYSE:PAH) is the most popular stock in this table. On the other hand ABM Industries, Inc. (NYSE:ABM) is the least popular one with only 13 bullish hedge fund positions. VeriFone Systems Inc (NYSE:PAY) 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 PAH might be a better candidate to consider taking a long position in.

Disclosure: None