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Hedge Funds Are Dumping Houghton Mifflin Harcourt Co (HMHC)

Since Houghton Mifflin Harcourt Co (NASDAQ:HMHC) has weathered a decline in interest from hedge fund managers, it’s safe to say that there exists a select few hedgies that elected to cut their positions entirely by the end of the third quarter. At the top of the heap, Michael M. Rothenberg’s Moab Capital Partners dropped the largest stake of all the investors watched by Insider Monkey, valued at an estimated $5.7 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also sold off its stock, about $4.3 million worth.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Houghton Mifflin Harcourt Co (NASDAQ:HMHC) but similarly valued. These stocks are Xenia Hotels & Resorts Inc (NYSE:XHR), Stamps.com Inc. (NASDAQ:STMP), Descartes Systems Group (USA) (NASDAQ:DSGX), and Corrections Corp Of America (NYSE:CXW). This group of stocks’ market caps match HMHC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
XHR 16 77504 5
STMP 31 415305 4
DSGX 4 25628 0
CXW 27 186592 12

As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $176 million. That figure was $646 million in HMHC’s case. Stamps.com Inc. (NASDAQ:STMP) is the most popular stock in this table. On the other hand Descartes Systems Group (USA) (NASDAQ:DSGX) is the least popular one with only 4 bullish hedge fund positions. Houghton Mifflin Harcourt Co (NASDAQ:HMHC) is not the least popular stock in this group but hedge fund interest is still below 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 STMP might be a better candidate to consider taking a long position in.

Disclosure: None

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