Is Comstock Mining, Inc. (LODE) Going to Burn These Hedge Funds?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Solus Alternative Asset Management. 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 here because none of the 700+ hedge funds tracked by Insider Monkey identified Comstock Mining, Inc. (NYSEMKT:LODE) as a viable investment and initiated a position in the stock.

Let’s now take a look at hedge fund activity in other stocks similar to Comstock Mining, Inc. (NYSEMKT:LODE). These stocks are Cyren Ltd (NASDAQ:CYRN), Barington/Hilco Acquisition Corp. Common Stock (NASDAQ:BHAC), Vringo, Inc. (NASDAQ:VRNG), and LRAD Corp (NASDAQ:LRAD). This group of stocks’ market caps are closest to Comstock Mining, Inc. (NYSEMKT:LODE)’s market cap.

As you can see, these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $3 million in Comstock Mining, Inc. (NYSEMKT:LODE)’s case. Cyren Ltd (NASDAQ:CYRN) is the most popular stock in this table. On the other hand, Barington/Hilco Acquisition Corp. Common Stock (NASDAQ:BHAC) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks, Comstock Mining, Inc. (NYSEMKT:LODE) is even less popular than Barington/Hilco Acquisition Corp. Common Stock (NASDAQ:BHAC). 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.