We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: LMR Partners. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 700+ hedge funds tracked by Insider Monkey identified ABR as a viable investment and initiated a position in the stock.
Let’s check out hedge fund activity in other stocks similar to Arbor Realty Trust, Inc. (NYSE:ABR). We will take a look at Parker Drilling Company (NYSE:PKD), Medifast, Inc. (NYSE:MED), Safeguard Scientifics, Inc (NYSE:SFE), and Suffolk Bancorp (NASDAQ:SUBK). This group of stocks’ market values resemble ABR’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 9.5 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $8 million in ABR’s case. Medifast, Inc. (NYSE:MED) is the most popular stock in this table. On the other hand Safeguard Scientifics, Inc (NYSE:SFE) is the least popular one with only 5 bullish hedge fund positions. Arbor Realty Trust, Inc. (NYSE:ABR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MED might be a better candidate to consider a long position.