Hedge Funds Are Selling Inovalon Holdings Inc (INOV)

Judging by the fact that Inovalon Holdings Inc (NASDAQ:INOV) has faced a falling interest from the smart money, it’s easy to see that there was a specific group of funds who sold off their positions entirely in the third quarter. At the top of the heap, Clifford Fox’s Columbus Circle Investors dumped the biggest stake of the “upper crust” of funds watched by Insider Monkey, worth an estimated $20.1 million in stock. Peter Muller’s fund, PDT Partners, also cut its stock, about $1.2 million worth of shares. These transactions are important to note, as total hedge fund interest fell by 1 fund in the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Inovalon Holdings Inc (NASDAQ:INOV). These stocks are Royal Gold, Inc USA) (NASDAQ:RGLD), WuXi PharmaTech (Cayman) Inc. (ADR) (NYSE:WX), MPLX LP (NYSE:MPLX), and American Eagle Outfitters (NYSE:AEO). This group of stocks’ market valuations are closest to Inovalon Holdings Inc (NASDAQ:INOV)’s market valuation.

As you can see, these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $335 million. That figure was $32 million in Inovalon Holdings Inc (NASDAQ:INOV)’s case. American Eagle Outfitters (NYSE:AEO) is the most popular stock in this table. On the other hand, MPLX LP (NYSE:MPLX) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks, Inovalon Holdings Inc (NASDAQ:INOV) is even less popular than MPLX LP (NYSE:MPLX). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.