Is Hampton Roads Bankshares, Inc. (HMPR) A Good Stock To Buy?

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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 now review hedge fund activity in other stocks similar to Hampton Roads Bankshares, Inc. (NASDAQ:HMPR). We will take a look at Arbor Realty Trust, Inc. (NYSE:ABR), Parker Drilling Company (NYSE:PKD), Medifast, Inc. (NYSE:MED), and Safeguard Scientifics, Inc (NYSE:SFE). This group of stocks’ market values resemble HMPR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ABR 9 8294 -1
PKD 9 3097 -3
MED 14 95101 -2
SFE 5 4416 1

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 $28 million. HMPR, on the other hand, managed to attract an impressive $106 million. Medifast, Inc. (NYSE:MED) is the most popular stock in this table, while Safeguard Scientifics, Inc (NYSE:SFE) is the laggard with only 5 bullish hedge fund positions. Hampton Roads Bankshares, Inc. (NASDAQ:HMPR) 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 MED might be a better candidate to consider a long position.

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