Is Allot Communications Ltd. (ALLT) A Good Stock To Buy?

Because Allot Communications Ltd. (NASDAQ:ALLT) has experienced a declination in interest from hedge fund managers, it’s easy to see that there is a sect of funds that decided to sell off their positions entirely in the third quarter. It’s worth mentioning that Ken Griffin’s Citadel Investment Group cut the largest stake of the “upper crust” of funds tracked by Insider Monkey, comprising about $0.3 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also sold off its stock, about $0.1 million worth of shares. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 1 fund in the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Allot Communications Ltd. (NASDAQ:ALLT) but similarly valued. We will take a look at Emerge Energy Services LP (NYSE:EMES), Orion Marine Group, Inc. (NYSE:ORN), UFP Technologies, Inc. (NASDAQ:UFPT), and Immunomedics, Inc. (NASDAQ:IMMU). All of these stocks’ market caps are similar to Allot Communications Ltd. (NASDAQ:ALLT)’s market cap.

As you can see, these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $27 million in Allot Communications Ltd. (NASDAQ:ALLT)’s case. Orion Marine Group, Inc. (NYSE:ORN) is the most popular stock in this table. On the other hand, Emerge Energy Services LP (NYSE:EMES) is the least popular one with only 5 bullish hedge fund positions. Allot Communications Ltd. (NASDAQ:ALLT) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Orion Marine Group, Inc. (NYSE:ORN) might be a better candidate to consider a long position.