Is Encore Wire Corporation (WIRE) A Good Stock To Buy?

Seeing as Encore Wire Corporation (NASDAQ:WIRE) has weathered declining sentiment from the aggregate hedge fund industry, we can see that there is a sect of funds who were dropping their entire stakes heading into Q4. Intriguingly, Israel Englander’s Millennium Management cut the biggest stake of the 700 funds tracked by Insider Monkey, totaling an estimated $2.4 million in stock, and Joel Greenblatt’s Gotham Asset Management was right behind this move, as the fund dropped about $0.6 million worth of shares.

Let’s also examine hedge fund activity in other stocks similar to Encore Wire Corporation (NASDAQ:WIRE). We will take a look at Constellium NV (NYSE:CSTM), Wave Life Sciences Ltd (NASDAQ:WVE), Innophos Holdings, Inc. (NASDAQ:IPHS), and McGrath RentCorp (NASDAQ:MGRC). This group of stocks’ market caps are similar to WIRE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CSTM 32 283817 4
WVE 5 299656 -1
IPHS 17 55931 3
MGRC 15 42754 3

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $171 million, versus $44 million in WIRE’s case. Constellium NV (NYSE:CSTM) is the most popular stock in this table. On the other hand Wave Life Sciences Ltd (NASDAQ:WVE) is the least popular one with only five bullish hedge fund positions. Encore Wire Corporation (NASDAQ:WIRE) 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 CSTM might be a better candidate to consider taking a long position in.

Disclosure: None