Should You Buy Proofpoint Inc (PFPT)?

Intriguingly, John Burbank’s Passport Capital said goodbye to the largest stake of all the hedgies followed by Insider Monkey, worth about $3.4 million in call options., and Israel Englander’s Millennium Management was right behind this move, as the fund said goodbye to about $3.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Proofpoint Inc (NASDAQ:PFPT) but similarly valued. We will take a look at SINA Corp (NASDAQ:SINA), EverBank Financial Corp (NYSE:EVER), KBR, Inc. (NYSE:KBR), and Dycom Industries, Inc. (NYSE:DY). This group of stocks’ market caps are similar to PFPT’s market cap.

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $440 million. That figure was $269 million in PFPT’s case. KBR, Inc. (NYSE:KBR) is the most popular stock in this table. On the other hand EverBank Financial Corp (NYSE:EVER) is the least popular one with only 8 bullish hedge fund positions. Proofpoint Inc (NASDAQ:PFPT) 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 KBR might be a better candidate to consider a long position.