Hedge Funds Are Dumping Tower International Inc (TOWR)

Due to the fact that Tower International Inc (NYSE:TOWR) has gone through falling interest from the smart money, logic holds that there is a sect of hedge funds who sold off their entire stakes in the third quarter. At the top of the heap, Joel Greenblatt’s Gotham Asset Management cashed in the biggest position of all the hedgies tracked by Insider Monkey, worth an estimated $3 million in stock. John Petry’s fund, Sessa Capital, also said goodbye to its stock, about $2.9 million worth.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Tower International Inc (NYSE:TOWR) but similarly valued. These stocks are GenMark Diagnostics, Inc (NASDAQ:GNMK), Enanta Pharmaceuticals Inc (NASDAQ:ENTA), Hostess Brands Inc (NASDAQ:GRSH), and Changyou.Com Ltd (ADR) (NASDAQ:CYOU). This group of stocks’ market caps are similar to TOWR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GNMK 11 96641 5
ENTA 12 66193 2
GRSH 30 196141 13
CYOU 14 78582 7

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 $109 million. That figure was $67 million in TOWR’s case. Hostess Brands Inc (NASDAQ:GRSH) is the most popular stock in this table. On the other hand GenMark Diagnostics, Inc (NASDAQ:GNMK) is the least popular one with only 11 bullish hedge fund positions. Tower International Inc (NYSE:TOWR) 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 GRSH might be a better candidate to consider taking a long position in.

Disclosure: None