Alibaba Group Holding Ltd (BABA) Shares Sinking After SEC Probe Revealed

Seeing as Alibaba Group Holding Ltd (NYSE:BABA) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there were a few fund managers who sold off their full holdings in the fourth quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the biggest stake of the “upper crust” of funds monitored by Insider Monkey, comprising about $172.5 million in stock. Bain Capital’s fund, Brookside Capital, also dumped its stock, about $118.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 10 funds in the fourth quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Alibaba Group Holding Ltd (NYSE:BABA). These stocks are Pfizer Inc. (NYSE:PFE), Chevron Corporation (NYSE:CVX), Royal Dutch Shell plc (ADR) (NYSE:RDS), and Novartis AG (ADR) (NYSE:NVS). This group of stocks’ market values are closest to BABA’s market value.

As you can see these stocks had an average of 55 hedge funds with bullish positions and the average amount invested in these stocks was $2.97 billion. That figure was $5.14 billion in BABA’s case. Pfizer Inc. (NYSE:PFE) is the most popular stock in this table. On the other hand Novartis AG (ADR) (NYSE:NVS) is the least popular one with only 22 bullish hedge fund positions. Alibaba Group Holding Ltd (NYSE:BABA) 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 PFE might be a better candidate to consider a long position.

Disclosure: None