Is Blue Nile Inc (NILE) Right for Your Portfolio?

As one would reasonably expect, some big names have been driving this bullishness. TCS Capital Management also made a $4.1 million investment in the stock during the quarter. The following funds were also among the new NILE investors: Ken Griffin’s Citadel Investment Group, Scott Fine and Peter Richards’s Empire Capital Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Blue Nile Inc (NASDAQ:NILE) but similarly valued. These stocks are Franklin Financial Network Inc (NYSE:FSB), Conyers Park Acquisition Corp. (NASDAQ:CPAA), Navigator Holdings Ltd (NYSE:NVGS), and First Foundation Inc (NASDAQ:FFWM). This group of stocks’ market valuations resemble NILE’s market valuation.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $118 million. That figure was $69 million in NILE’s case. Conyers Park Acquisition Corp. (NASDAQ:CPAA) is the most popular stock in this table. On the other hand First Foundation Inc (NASDAQ:FFWM) is the least popular one with only 7 bullish hedge fund positions. Blue Nile Inc (NASDAQ:NILE) 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 CPAA might be a better candidate to consider taking a long position in.

Disclosure: None