Is Compania Cervecerias Unidas S.A. (ADR) (CCU) A Good Stock To Buy?

Judging by the fact that Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU) has encountered bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few money managers that decided to sell off their entire stakes during the third quarter. At the top of the heap, First Eagle Investment Management sold off the biggest stake of all the hedgies watched by Insider Monkey, comprising close to $115.9 million in stock. Ram Seshan Venkateswaran’s fund, Vernier Capital, also cut its stock, about $6.1 million worth.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU) but similarly valued. We will take a look at Eagle Materials, Inc. (NYSE:EXP), Investors Bancorp, Inc. (NASDAQ:ISBC), VWR Corp (NASDAQ:VWR), and AMC Networks Inc (NASDAQ:AMCX). This group of stocks’ market valuations are closest to CCU’s market valuation.

As you can see these stocks had an average of 27 funds with bullish positions and the average amount invested in these stocks was $430 million. That figure was just $53 million in CCU’s case. Eagle Materials, Inc. (NYSE:EXP) is the most popular stock in this table. On the other hand Investors Bancorp, Inc. (NASDAQ:ISBC) is the least popular one with only 23 bullish hedge fund positions. Compared to these stocks Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU) is even less popular than Investors Bancorp, Inc. (NASDAQ:ISBC). 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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