What do Hedge Funds Think of Nortel Inversora S.A. (ADR) (NTL)?

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Nortel Inversora S.A. (ADR) (NYSE:NTL) but similarly valued. We will take a look at Pinnacle Entertainment, Inc (NASDAQ:PNK), Group 1 Automotive, Inc. (NYSE:GPI), Imperva Inc (NYSE:IMPV), and Manitowoc Company, Inc. (NYSE:MTW). This group of stocks’ market valuations resemble NTL’s market valuation.

As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $519 million. That figure was $17 million in NTL’s case. Pinnacle Entertainment, Inc (NASDAQ:PNK) is the most popular stock in this table. On the other hand Manitowoc Company, Inc. (NYSE:MTW) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Nortel Inversora S.A. (ADR) (NYSE:NTL) is even less popular than MTW. 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.