Should You Buy Cerner Corporation (CERN)?

As industrywide interest jumped, key money managers have been driving this bullishness. Jim Simons’ Renaissance Technologies initiated the most outsized position in Cerner Corporation (NASDAQ:CERN). According to regulatory filings, the fund had $46.2 million invested in the company at the end of the quarter. George Hall’s Clinton Group also initiated a $7.4 million position during the quarter. The following funds were also among the new CERN investors: Ken Griffin’s Citadel Investment Group, Glenn Russell Dubin’s Highbridge Capital Management, and Benjamin A. Smith’s Laurion Capital Management.

Let’s also examine hedge fund activity in other stocks similar to Cerner Corporation (NASDAQ:CERN). These stocks are Baker Hughes Incorporated (NYSE:BHI), Energy Transfer Partners LP (NYSE:ETP), Ecopetrol S.A. (ADR) (NYSE:EC), and Sirius XM Holdings Inc (NASDAQ:SIRI). This group of stocks’ market valuations are similar to CERN’s market valuation.

As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $1.14 billion. That figure was $873 million in CERN’s case. Baker Hughes Incorporated (NYSE:BHI) is the most popular stock in this table. On the other hand Ecopetrol S.A. (ADR) (NYSE:EC) is the least popular one with only 8 bullish hedge fund positions. Cerner Corporation (NASDAQ:CERN) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard BHI might be a better candidate to consider a long position.

Disclosure: none.