Is Ellie Mae Inc (ELLI) A Good Stock To Buy?

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Due to the fact that Ellie Mae Inc (NYSE:ELLI) has faced a decline in interest from hedge fund managers, it’s safe to say that there exists a select few money managers that slashed their positions entirely heading into Q4. At the top of the heap, Brett Barakett’s Tremblant Capital dumped the largest stake of the “upper crust” of funds followed by Insider Monkey, comprising an estimated $35.4 million in stock. Beeneet Kothari’s fund, Tekne Capital Management, also dropped its stock, about $18.1 million worth of ELLI shares. These transactions are interesting, as total hedge fund interest fell by 2 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Ellie Mae Inc (NYSE:ELLI) but similarly valued. These stocks are Tenet Healthcare Corp (NYSE:THC), Inovalon Holdings Inc (NASDAQ:INOV), CoreSite Realty Corp (NYSE:COR), and FireEye Inc (NASDAQ:FEYE). This group of stocks’ market values resemble ELLI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
THC 39 759241 0
INOV 4 2747 -2
COR 18 90393 0
FEYE 29 284327 2

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $284 million. That figure was $263 million in ELLI’s case. Tenet Healthcare Corp (NYSE:THC) is the most popular stock in this table. On the other hand Inovalon Holdings Inc (NASDAQ:INOV) is the least popular one with only 4 bullish hedge fund positions. Ellie Mae Inc (NYSE:ELLI) 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 THC might be a better candidate to consider a long position.

Disclosure: none.

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