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FairPoint Communications Inc (FRP): Are Hedge Funds Right About This Stock?

What’s a smart FairPoint Communications Inc (NASDAQ:FRP) investor to do?

In the financial world, there are dozens of methods market participants can use to analyze Mr. Market. Some of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best investment managers can outperform their index-focused peers by a superb margin (see just how much).

Equally as key, positive insider trading sentiment is a second way to look at the financial markets. Obviously, there are plenty of incentives for a bullish insider to cut shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the valuable potential of this tactic if piggybackers know where to look (learn more here).

FairPoint Communications Inc (NASDAQ:FRP)

Keeping this in mind, we’re going to examine the recent info for FairPoint Communications Inc (NASDAQ:FRP).

What does the smart money think about FairPoint Communications Inc (NASDAQ:FRP)?

Heading into Q3, a total of 12 of the hedge funds we track were bullish in this stock, a change of 9% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings considerably.

Out of the hedge funds we follow, Angelo Gordon & Co, managed by John M. Angelo and Michael L. Gordon, holds the biggest position in FairPoint Communications Inc (NASDAQ:FRP). Angelo Gordon & Co has a $42.8 million position in the stock, comprising 3.1% of its 13F portfolio. On Angelo Gordon & Co’s heels is Kevin Michael Ulrich of Anchorage Advisors, with a $21.3 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Eric Edidin and Josh Lobel’s Archer Capital Management, Howard Guberman’s Gruss Asset Management and Jacob Gottlieb’s Visium Asset Management.

With a general bullishness amongst the titans, certain money managers were leading the bulls’ herd. Angelo Gordon & Co, managed by John M. Angelo and Michael L. Gordon, assembled the most outsized position in FairPoint Communications Inc (NASDAQ:FRP). Angelo Gordon & Co had 42.8 million invested in the company at the end of the quarter. Kevin Michael Ulrich’s Anchorage Advisors also initiated a $21.3 million position during the quarter. The other funds with brand new FRP positions are Eric Edidin and Josh Lobel’s Archer Capital Management, Howard Guberman’s Gruss Asset Management, and Jacob Gottlieb’s Visium Asset Management.

How are insiders trading FairPoint Communications Inc (NASDAQ:FRP)?

Insider buying made by high-level executives is particularly usable when the primary stock in question has experienced transactions within the past six months. Over the latest 180-day time period, FairPoint Communications Inc (NASDAQ:FRP) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to FairPoint Communications Inc (NASDAQ:FRP). These stocks are EarthLink, Inc. (NASDAQ:ELNK), Alaska Communications Systems Group Inc (NASDAQ:ALSK), Shenandoah Telecommunications Company (NASDAQ:SHEN), Hickory Tech Corporation (NASDAQ:HTCO), and magicJack VocalTec Ltd (NASDAQ:CALL). This group of stocks are the members of the telecom services – domestic industry and their market caps are closest to FRP’s market cap.