Is Independence Contract Drilling Inc (ICD) 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 check out hedge fund activity in other stocks similar to Independence Contract Drilling Inc (NYSE:ICD). These stocks are Derma Sciences Inc (NASDAQ:DSCI), Commercial Vehicle Group, Inc. (NASDAQ:CVGI), Golden Entertainment Inc (NASDAQ:GDEN), and Upland Software Inc (NASDAQ:UPLD). This group of stocks’ market valuations resemble ICD’s market valuation.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $28 million, compared to just $7 million in ICD’s case. Derma Sciences Inc (NASDAQ:DSCI) is the most popular stock in this table, while Upland Software Inc (NASDAQ:UPLD) is the least popular one with only 4 bullish hedge fund positions. Independence Contract Drilling Inc (NYSE:ICD) 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 DSCI might be a better candidate to consider a long position.