Should You Buy Vermilion Energy Inc (VET)?

Judging by the fact that Vermilion Energy Inc (NYSE:VET) has weathered a decline in interest from the smart money, it’s safe to say that there is a sect of hedge funds who were dropping their positions entirely in the third quarter. At the top of the heap, Jim Simons’s Renaissance Technologies cut the biggest investment of the 700 funds studied by Insider Monkey, valued at an estimated $2.5 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund sold off about $1.4 million worth of shares.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Vermilion Energy Inc (NYSE:VET) but similarly valued. These stocks are Lazard Ltd (NYSE:LAZ), Store Capital Corp (NYSE:STOR), MSC Industrial Direct Co Inc (NYSE:MSM), and Hospitality Properties Trust (NYSE:HPT). This group of stocks’ market caps match VET’s market cap.

As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $295 million. That figure was $10 million in VET’s case. MSC Industrial Direct Co Inc (NYSE:MSM) is the most popular stock in this table. On the other hand Store Capital Corp (NYSE:STOR) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Vermilion Energy Inc (NYSE:VET) is even less popular than STOR. 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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