Do Hedge Funds Love SolarWinds Inc (SWI)?

Judging by the fact that SolarWinds Inc (NYSE:SWI) has experienced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few fund managers that elected to cut their entire stakes in the third quarter. Interestingly, Stephen Mandel’s Lone Pine Capital sold off the largest position of all the hedgies watched by Insider Monkey, totaling close to $116.2 million in stock. Karthik Sarma’s fund, SRS Investment Management, also cut its investment, about $110.7 million worth of SWI shares. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 4 funds in the third quarter.

Let’s now review hedge fund activity in other stocks similar to SolarWinds Inc (NYSE:SWI). These stocks are Synaptics, Incorporated (NASDAQ:SYNA), EnLink Midstream LLC (NYSE:ENLC), ITT Corp (NYSE:ITT), and Methanex Corporation (USA) (NASDAQ:MEOH). All of these stocks’ market caps are similar to SWI’s market cap.

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $170 million. That figure was a whooping $404 million in SWI’s case. ITT Corp (NYSE:ITT) is the most popular stock in this table, while EnLink Midstream LLC (NYSE:ENLC) is the laggard with only 10 bullish hedge fund positions. SolarWinds Inc (NYSE:SWI) 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 ITT might be a better candidate to consider a long position.