Is Arbor Realty Trust, Inc. (ABR) a Good Stock To Buy?

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.

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.