Is Five Below Inc (FIVE) Going to Burn These Hedge Funds?

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Due to the fact that Five Below Inc (NASDAQ:FIVE) has faced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few hedge funds that decided to sell off their entire stakes last quarter. Intriguingly, Jim Simons’s Renaissance Technologies dropped the biggest position of the “upper crust” of funds watched by Insider Monkey, worth an estimated $22.4 million in stock, and Alexander Mitchell of Scopus Asset Management was right behind this move, as the fund said goodbye to about $11.8 million worth of shares. These transactions are important to note, as aggregate hedge fund interest was cut by 8 funds last quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Five Below Inc (NASDAQ:FIVE) but similarly valued. We will take a look at American Assets Trust, Inc (NYSE:AAT), Kemper Corporation (NYSE:KMPR), InterDigital, Inc. (NASDAQ:IDCC), and Evercore Partners Inc. (NYSE:EVR). This group of stocks’ market valuations resemble FIVE’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AAT 7 88354 -3
KMPR 6 10389 -1
IDCC 19 294575 -5
EVR 19 112684 -3

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $127 million. That figure was $148 million in FIVE’s case, which is a positive sign. InterDigital, Inc. (NASDAQ:IDCC) is the most popular stock in this table. On the other hand Kemper Corporation (NYSE:KMPR) is the least popular one with only 6 bullish hedge fund positions. Five Below Inc (NASDAQ:FIVE) is not the least popular stock in this group, yet hedge fund interest is still below average and we treat this is a slightly negative signal. We’d rather spend our time researching stocks that hedge funds are piling on and believe IDCC might be a better candidate for further research before considering a long position.

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