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Is Garrison Capital Inc (GARS) A Good Stock To Buy?

Due to the fact that Garrison Capital Inc (NASDAQ:GARS) has faced a bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedge funds that decided to sell off their full holdings heading into Q4. It’s worth mentioning that John Fichthorn’s Dialectic Capital Management sold off the largest position of all the hedgies tracked by Insider Monkey, comprising an estimated $1 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dropped about $0.6 million worth of shares. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 1 fund heading into Q4.

Let’s now take a look at hedge fund activity in other stocks similar to Garrison Capital Inc (NASDAQ:GARS). We will take a look at Heritage-Crystal Clean, Inc. (NASDAQ:HCCI), Proteon Therapeutics Inc (NASDAQ:PRTO), Hawaiian Telcom HoldCo Inc (NASDAQ:HCOM), and Steel Excel Inc (NASDAQ:SXCL). This group of stocks’ market valuations are similar to Garrison Capital Inc (NASDAQ:GARS)’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HCCI 4 34482 0
PRTO 4 46207 0
HCOM 8 25759 1
SXCL 4 152736 3

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 $65 million. That figure was $3 million in Garrison Capital Inc (NASDAQ:GARS)’s case. Hawaiian Telcom HoldCo Inc (NASDAQ:HCOM) is the most popular stock in this table. On the other hand, Heritage-Crystal Clean, Inc. (NASDAQ:HCCI) is the least popular one with only 4 bullish hedge fund positions. Garrison Capital Inc (NASDAQ:GARS) 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, Hawaiian Telcom HoldCo Inc (NASDAQ:HCOM) might be a better candidate to consider a long position.

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