Are Hedge Funds Right to be Bearish on Carrizo Oil & Gas Inc (CRZO)?

Due to the fact that Carrizo Oil & Gas Inc (NASDAQ:CRZO) has experienced falling interest from the aggregate hedge fund industry, it’s safe to say that there was a specific group of hedge funds that decided to sell off their full holdings last quarter. It’s worth mentioning that John Labanowski’s Brenham Capital Management sold off the biggest stake of the “upper crust” of funds watched by Insider Monkey, totaling about $25.1 million in stock, and Clint Carlson’s Carlson Capital was right behind this move, as the fund said goodbye to about $18.5 million worth of shares. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 6 funds last quarter.

Let’s now review hedge fund activity in other stocks similar to Carrizo Oil & Gas Inc (NASDAQ:CRZO). These stocks are Kosmos Energy Ltd (NYSE:KOS), Cornerstone OnDemand, Inc. (NASDAQ:CSOD), Dillard’s, Inc. (NYSE:DDS), and Stifel Financial Corp. (NYSE:SF). All of these stocks’ market caps match CRZO’s market cap.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $197 million. That figure was $168 million in CRZO’s case. Cornerstone OnDemand, Inc. (NASDAQ:CSOD) is the most popular stock in this table. On the other hand Kosmos Energy Ltd (NYSE:KOS) is the least popular one with only 7 bullish hedge fund positions. Carrizo Oil & Gas Inc (NASDAQ:CRZO) 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 CSOD might be a better candidate to consider a long position.

Disclosure: None