Should You Be Concerned That Smart Money Is Fleeing ALLETE Inc (ALE)?

Judging by the fact that ALLETE Inc (NYSE:ALE) has weathered falling interest from the smart money, we can see that there exists a select few fund managers that elected to cut their entire stakes in the third quarter. Interestingly, Israel Englander’s Millennium Management got rid of the largest investment of the “upper crust” of funds watched by Insider Monkey, comprising an estimated $3.2 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also dropped its stock, about $2.1 million worth.

Let’s go over hedge fund activity in other stocks similar to ALLETE Inc (NYSE:ALE). These stocks are UMB Financial Corporation (NASDAQ:UMBF), Sarepta Therapeutics Inc (NASDAQ:SRPT), Air Lease Corp (NYSE:AL), and Vector Group Ltd (NYSE:VGR). This group of stocks’ market valuations are similar to ALE’s market valuation.

As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $410 million. That figure was $56 million in ALE’s case. Sarepta Therapeutics Inc (NASDAQ:SRPT) is the most popular stock in this table. On the other hand UMB Financial Corporation (NASDAQ:UMBF) is the least popular one with only 9 bullish hedge fund positions. ALLETE Inc (NYSE:ALE) 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 SRPT might be a better candidate to consider taking a long position in.

Disclosure: None