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Do Hedge Funds Love Herbalife Ltd. (HLF)?

Seeing as Herbalife Ltd. (NYSE:HLF) has experienced a declination in interest from the entirety of the hedge funds we track, logic holds that there were a few hedgies that elected to cut their positions entirely heading into Q4. Interestingly, George Soros’ Soros Fund Management said goodbye to the largest investment of all the hedgies followed by Insider Monkey, valued at about $108.5 million in call options, and Benjamin A. Smith’s Laurion Capital Management was right behind this move, as the fund dropped about $55.1 million worth of shares. These transactions are important to note, as aggregate hedge fund interest dropped by 2 funds heading into Q4.

Let’s now review hedge fund activity in other stocks similar to Herbalife Ltd. (NYSE:HLF). These stocks are Gol Linhas Aereas Inteligentes SA (ADR) (NYSE:GOL), KAR Auction Services Inc (NYSE:KAR), Panera Bread Co (NASDAQ:PNRA), and Black Knight Financial Services Inc (NYSE:BKFS). All of these stocks’ market caps are closest to HLF’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GOL 5 15528 -4
KAR 44 1239158 2
PNRA 23 689406 -4
BKFS 15 41563 -4

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $496 million. That figure was $1.67 billion in HLF’s case. KAR Auction Services Inc (NYSE:KAR) is the most popular stock in this table. On the other hand Gol Linhas Aereas Inteligentes SA (ADR) (NYSE:GOL) is the least popular one with only 5 bullish hedge fund positions. Herbalife Ltd. (NYSE:HLF) 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 KAR might be a better candidate to consider a long position.

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