Should You Buy Baldwin & Lyons Inc (BWINB)?

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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. 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 Baldwin & Lyons Inc (NASDAQ:BWINB). We will take a look at Del Frisco’s Restaurant Group Inc (NASDAQ:DFRG), Hampton Roads Bankshares, Inc. (NASDAQ:HMPR), Arbor Realty Trust, Inc. (NYSE:ABR), and Parker Drilling Company (NYSE:PKD). This group of stocks’ market caps resemble BWINB’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DFRG 23 84739 6
HMPR 6 106038 0
ABR 9 8294 -1
PKD 9 3097 -3

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $54 million in BWINB’s case. Del Frisco’s Restaurant Group Inc (NASDAQ:DFRG) is the most popular stock in this table, while Hampton Roads Bankshares, Inc. (NASDAQ:HMPR) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Baldwin & Lyons Inc (NASDAQ:BWINB) is even less popular than HMPR. 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.

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