Is Hallmark Financial Services, Inc. (HALL) A Good Stock To Buy?

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 go over hedge fund activity in other stocks similar to Hallmark Financial Services, Inc. (NASDAQ:HALL). We will take a look at Wi-LAN Inc – US listing (NASDAQ:WILN), Horizon Bancorp (NASDAQ:HBNC), XenoPort, Inc. (NASDAQ:XNPT), and Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL). All of these stocks’ market caps are closest to HALL’s market cap.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $20 million in HALL’s case. Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) is the most popular stock in this table. On the other hand Horizon Bancorp (NASDAQ:HBNC) is the least popular one with only 4 bullish hedge fund positions, on par with Hallmark Financial Services, Inc. (NASDAQ:HALL). Considering that hedge funds aren’t very fond of this stock in relation to most of other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.