Should You Buy Stonegate Bank (SGBK)?

Moreover, Nine Chapters Capital Management, managed by Chao Ku, was the only fund that initiated a stake in Stonegate Bank (NASDAQ:SGBK), which was worth $0.4 million at the end of the third quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Stonegate Bank (NASDAQ:SGBK) but similarly valued. These stocks are Noodles & Co (NASDAQ:NDLS), Century Aluminum Co (NASDAQ:CENX), Ashford Hospitality Prime Inc (NYSE:AHP), and Memorial Production Partners LP (NASDAQ:MEMP). All of these stocks’ market caps match SGBK’s market cap.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $31 million, which is higher than in SGBK’s case. Century Aluminum Co (NASDAQ:CENX) is the most popular stock in this table with a total of 14 funds reporting long positions. On the other hand Memorial Production Partners LP (NASDAQ:MEMP) is the least popular one with only 4 bullish hedge fund positions. Stonegate Bank (NASDAQ:SGBK) 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 CENX might be a better candidate to consider a long position.