Is AppFolio Inc (APPF) A Good Stock To Buy?

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Because AppFolio Inc (NASDAQ:APPF) has faced a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of money managers that decided to sell off their positions entirely last quarter. Intriguingly, David Rodriguez-Fraile’s BlueMar Capital Management cut the largest stake of all the hedgies monitored by Insider Monkey, totaling an estimated $1.6 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also said goodbye to its stock, about $1.4 million worth of shares. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as AppFolio Inc (NASDAQ:APPF) but similarly valued. These stocks are Blucora Inc (NASDAQ:BCOR), Heritage Financial Corporation (NASDAQ:HFWA), Resources Connection, Inc. (NASDAQ:RECN), and Forrester Research, Inc. (NASDAQ:FORR). All of these stocks’ market caps match AppFolio Inc (NASDAQ:APPF)’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BCOR 16 68574 -5
HFWA 10 56119 0
RECN 11 31991 -1
FORR 10 56855 1

As you can see, these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $14 million in AppFolio Inc (NASDAQ:APPF)’s case. Blucora Inc (NASDAQ:BCOR) is the most popular stock in this table. On the other hand, Heritage Financial Corporation (NASDAQ:HFWA) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks, AppFolio Inc (NASDAQ:APPF) is even less popular than Heritage Financial Corporation (NASDAQ:HFWA). 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.

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