How does smart money feel about Chegg Inc (CHGG)?

Judging by the fact that Chegg Inc (NYSE:CHGG) has faced bearish sentiment from the aggregate hedge fund industry, logic holds that there is a sect of fund managers who sold off their full holdings last quarter. Interestingly, Chuck Royce’s Royce & Associates sold off the biggest stake of the 700 funds watched by Insider Monkey, worth an estimated $1.6 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital was right behind this move, as the fund dumped about $0.8 million worth. These transactions are interesting, as total hedge fund interest fell by 4 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to Chegg Inc (NYSE:CHGG). We will take a look at Diamond Hill Investment Group, Inc. (NASDAQ:DHIL), , Dime Community Bancshares, Inc. (NASDAQ:DCOM), and SJW Corp. (NYSE:SJW). This group of stocks’ market caps resemble CHGG’s market cap.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $40 million.That figure was $86 million in CHGG’s case. Sportsman’s Warehouse Holdings Inc (NASDAQ:SPWH) is the most popular stock in this table and the least popular one is Diamond Hill Investment Group, Inc. (NASDAQ:DHIL). In comparison, Chegg Inc (NYSE:CHGG) is not the least nor the most popular among these stocks, but it still attracts attention from investors. Although, this may imply it is a good stock to buy, we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SPWH might be a better candidate to consider a long position.