Is Evolution Petroleum Corporation (EPM) Going to Burn These Hedge Funds?

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s also examine hedge fund activity in other stocks similar to Evolution Petroleum Corporation (NYSEMKT:EPM). These stocks are MFC Industrial Ltd (NYSE:MIL), Repros Therapeutics Inc (NASDAQ:RPRX), SeaSpine Holdings Corp (NASDAQ:SPNE), and Avinger Inc (NASDAQ:AVGR). All of these stocks’ market caps resemble Evolution Petroleum Corporation (NYSEMKT:EPM)’s market cap.

As you can see, these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $10 million in Evolution Petroleum Corporation (NYSEMKT:EPM)’s case. Repros Therapeutics Inc (NASDAQ:RPRX) is the most popular stock in this table. On the other hand, MFC Industrial Ltd (NYSE:MIL) is the least popular one with only 4 bullish hedge fund positions. Evolution Petroleum Corporation (NYSEMKT:EPM) 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, Repros Therapeutics Inc (NASDAQ:RPRX) might be a better candidate to consider a long position.