Is Carlyle Group LP (CG) A Bad Stock To Buy?

As one would reasonably expect, specific money managers have been driving this bullishness. McKinley Capital Management, led by Robert B. Gillam, initiated the biggest position in Carlyle Group LP (NASDAQ:CG). McKinley Capital Management had $1.4 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.6 million position during the quarter, the only other fund with a brand new CG position.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Carlyle Group LP (NASDAQ:CG) but similarly valued. These stocks are Royal Gold, Inc USA) (NASDAQ:RGLD), Scotts Miracle-Gro Co (NYSE:SMG), Weatherford International Ltd (NYSE:WFT), and Gentex Corporation (NASDAQ:GNTX). This group of stocks’ market values are similar to CG’s market value.

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $308 million. That figure was $91 million in CG’s case. Weatherford International Ltd (NYSE:WFT) is the most popular stock in this table. On the other hand Royal Gold, Inc USA) (NASDAQ:RGLD) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Carlyle Group LP (NASDAQ:CG) is even less popular than RGLD. 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.

Disclosure: None