Do Hedge Funds Love Key Energy Services, Inc. (KEG)?

Judging by the fact that Key Energy Services, Inc. (NYSE:KEG) has experienced declining sentiment from the smart money, it’s easy to see that there is a sect of hedge funds who sold off their positions entirely last quarter. It’s worth mentioning that Malcolm Fairbairn’s Ascend Capital said goodbye to the biggest investment of the “upper crust” of funds followed by Insider Monkey, worth an estimated $2.2 million in stock. Robert Henry Lynch’s fund, Aristeia Capital, also said goodbye to a big part of its holding, about $1.7 million worth of shares. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 5 funds last quarter.

Let’s check out hedge fund activity in other stocks similar to Key Energy Services, Inc. (NYSE:KEG). These stocks are North American Energy Partners Inc.(USA) (NYSE:NOA), Health Insurance Innovations Inc (NASDAQ:HIIQ), Spark Networks Inc (NYSEMKT:LOV), and Digirad Corporation (NASDAQ:DRAD). This group of stocks’ market caps match KEG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NOA 6 19976 1
HIIQ 4 11239 -1
LOV 9 21741 0
DRAD 4 7199 0

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was also $15 million in KEG’s case, which is not a very good sign. Spark Networks Inc (NYSEMKT:LOV) is the most popular stock in this table, while Health Insurance Innovations Inc (NASDAQ:HIIQ) is the laggard with only 4 bullish hedge fund positions. Compared to these stocks Key Energy Services, Inc. (NYSE:KEG) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.