Should You Buy Arowana Inc. Ordinary Shares (ARWA)?

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Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions either. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s now review hedge fund activity in other stocks similar to Arowana Inc. Ordinary Shares (NASDAQ:ARWA). These stocks are Attunity Ltd (NASDAQ:ATTU), Aurinia Pharmaceuticals Inc (NASDAQ:AUPH), Gridsum Holding Inc – ADR (NASDAQ:GSUM), and QLT Inc. (USA) (NASDAQ:QLTI). This group of stocks’ market valuations are similar to ARWA’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ATTU 6 13133 -1
AUPH 3 867 -2
GSUM 17 48219 17
QLTI 12 29161 -2

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $13 million in ARWA’s case. Gridsum Holding Inc – ADR (NASDAQ:GSUM) is the most popular stock in this table. On the other hand Aurinia Pharmaceuticals Inc (NASDAQ:AUPH) is the least popular one with only 3 bullish hedge fund positions. Arowana Inc. Ordinary Shares (NASDAQ:ARWA) 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 GSUM might be a better candidate to consider taking a long position in.

Disclosure: None


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