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Hedge Funds Are Getting Burned by Natural Grocers by Vitamin Cottage Inc (NGVC)

As industrywide interest jumped, key money managers were leading the bulls’ herd. D E Shaw, founded by David E. Shaw, created the most outsized position in Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC). D E Shaw had $0.7 million invested in the company at the end of the quarter. Ken Gray and Steve Walsh’s Bryn Mawr Capital also initiated a $0.5 million position during the quarter. The only other fund with a new position in the stock is Chao Ku’s Nine Chapters Capital Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) but similarly valued. We will take a look at Tronox Ltd (NYSE:TROX), HomeStreet Inc (NASDAQ:HMST), First Trust High Income Long/short Fund (NYSE:FSD), and SunCoke Energy, Inc (NYSE:SXC). This group of stocks’ market valuations match NGVC’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TROX 12 50093 -5
HMST 12 17257 -1
FSD 6 27261 2
SXC 35 169694 0

As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $14 million in NGVC’s case. SunCoke Energy, Inc (NYSE:SXC) is the most popular stock in this table. On the other hand First Trust High Income Long/short Fund (NYSE:FSD) is the least popular one with only 6 bullish hedge fund positions. Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) 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 SXC might be a better candidate to consider a long position in.

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