Brocade Communications Systems, Inc. (BRCD) Hits 52-Week Low; Is Now The Time To Buy?

Since Brocade Communications Systems, Inc. (NASDAQ:BRCD) has experienced a declination in interest from the aggregate hedge fund industry, we can see that there lies a certain “tier” of money managers that elected to cut their entire stakes last quarter. Intriguingly, Nick Niell’s Arrowgrass Capital Partners cut the biggest stake of all the hedgies watched by Insider Monkey, comprising about $9.3 million in stock. Clint Carlson’s fund, Carlson Capital, also cut its stock, about $4.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 1 fund last quarter.

Let’s go over hedge fund activity in other stocks similar to Brocade Communications Systems, Inc. (NASDAQ:BRCD). We will take a look at VCA Antech Inc (NASDAQ:WOOF), Investors Bancorp, Inc. (NASDAQ:ISBC), King Digital Entertainment PLC (NYSE:KING), and Orbital ATK Inc (NYSE:OA). This group of stocks’ market valuations are closest to Brocade Communications Systems, Inc. (NASDAQ:BRCD)’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WOOF 38 839129 8
ISBC 26 689935 -8
KING 18 303994 -6
OA 33 756743 3

As you can see these stocks had an average of 28.75 hedge funds with bullish positions and the average amount invested in these stocks was $647 million. That figure was $601 million in Brocade Communications Systems, Inc. (NASDAQ:BRCD)’s case. VCA Antech Inc (NASDAQ:WOOF) is the most popular stock in this table. On the other hand King Digital Entertainment PLC (NYSE:KING) is the least popular one with only 18 bullish hedge fund positions. Brocade Communications Systems, Inc. (NASDAQ:BRCD) 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 VCA Antech Inc might be a better candidate to consider a long position in at this time.