Hedge Funds Are Losing Interest In Capital Southwest Corporation (CSWC)

Judging by the fact that Capital Southwest Corporation (NASDAQ: CSWC) has experienced a bearish sentiment from hedge fund managers, it’s easy to see that there were a few funds that decided to sell off their full holdings by the end of the third quarter. At the top of the heap, John A. Levin’s Levin Capital Strategies sold off the biggest position of the 700 funds watched by Insider Monkey, worth close to $0.9 million in stock, and Ken Griffin of Citadel Investment Group was right behind this move, as the fund said goodbye to about $0.4 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 3 funds by the end of the third quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Capital Southwest Corporation (NASDAQ:CSWC) but similarly valued. These stocks are Capital Product Partners L.P. (NASDAQ:CPLP), Sun Hydraulics Corporation (NASDAQ:SNHY), 8×8, Inc. (NASDAQ:EGHT), and MacroGenics Inc (NASDAQ:MGNX). This group of stock market valuations is similar to Capital Southwest Corporation (NASDAQ:CSWC)’s market valuation.

As you can see, these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $80 million. MacroGenics Inc (NASDAQ:MGNX) and Capital Product Partners L.P. (NASDAQ:CPLP) are the most and the least popular stocks, respectively. In comparison, Capital Southwest Corporation (NASDAQ:CSWC) is not the least popular stock in this group, but hedge fund interest is still below average, while the total value of holdings in the company amounted to $150 million. Capital Southwest may be a investment worth acquiring, but we prefer to look closer into stocks that hedge funds are collectively the most bullish on, such as MGNX.