Sprouts Farmers Market Inc (SFM): Are Hedge Funds Right About This Stock?

Due to the fact that Sprouts Farmers Market Inc (NASDAQ:SFM) has experienced falling interest from the smart money, it’s easy to see that there were a few hedge funds that elected to cut their entire stakes heading into Q4. Interestingly, George Hall’s Clinton Group sold off the biggest position of the 700 funds followed by Insider Monkey, worth about $11.4 million worth of stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund cut about $9.2 million worth of options. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to Sprouts Farmers Market Inc (NASDAQ:SFM). We will take a look at Rice Energy Inc (NYSE:RICE), NCR Corporation (NYSE:NCR), WEX Inc (NYSE:WEX), and Corelogic Inc (NYSE:CLGX). This group of stocks’ market caps match SFM’s market cap.

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 $505 million. That figure was just $140 million in SFM’s case. Rice Energy Inc (NYSE:RICE) is the most popular stock in this table. On the other hand WEX Inc (NYSE:WEX) is the least popular one with only 10 bullish hedge fund positions. Sprouts Farmers Market Inc (NASDAQ:SFM) 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 RICE might be a better candidate to consider a long position.

Disclosure: none.