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Do Hedge Funds Love Quality Systems, Inc. (QSII)?

Intriguingly, Israel Englander’s Millennium Management said goodbye to the largest stake of the “upper crust” of funds tracked by Insider Monkey, comprising an estimated $6.1 million in stock. Neil Chriss’ fund, Hutchin Hill Capital, also dumped its stock, about $0.9 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Quality Systems, Inc. (NASDAQ:QSII) but similarly valued. These stocks are Leju Holdings Ltd (ADR) (NYSE:LEJU), U.S. Silica Holdings Inc (NYSE:SLCA), RPX Corp (NASDAQ:RPXC), and Meridian Interstate Bancorp, Inc. (NASDAQ:EBSB). All of these stocks’ market caps are closest to QSII’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LEJU 12 8802 1
SLCA 22 243161 -10
RPXC 18 60652 0
EBSB 16 130962 0

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 $111 million. That figure was $48 million in QSII’s case. U.S. Silica Holdings Inc (NYSE:SLCA) is the most popular stock in this table. On the other hand Leju Holdings Ltd (ADR) (NYSE:LEJU) is the least popular one with only 12 bullish hedge fund positions. Quality Systems, Inc. (NASDAQ:QSII) is not the least popular stock in this group but hedge fund interest is just average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SLCA might be a better candidate to consider a long position.

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