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Is KCAP Financial Inc (KCAP) A Good Stock to Buy?

With general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Algert Coldiron Investors established the largest new position in KCAP Financial Inc (NASDAQ:KCAP). Algert Coldiron Investors had $0.3 million invested in the company at the end of the quarter. Millennium Management also made a $0.1 million investment in the stock during the quarter. The only other fund with a new position in the stock was Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s also examine hedge fund activity in other stocks similar to KCAP Financial Inc (NASDAQ:KCAP). These stocks are Osiris Therapeutics, Inc. (NASDAQ:OSIR), Gencor Industries, Inc. (DE) (NASDAQ:GENC), Adverum Biotechnologies Inc (NASDAQ:ADVM), and Ocular Therapeutix Inc (NASDAQ:OCUL). All of these stocks’ market caps are similar to KCAP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
OSIR 7 4438 -2
GENC 4 6637 0
ADVM 11 15276 -4
OCUL 6 6414 -5

As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $5 million in KCAP’s case. Adverum Biotechnologies Inc (NASDAQ:ADVM) is the most popular stock in this table. On the other hand Gencor Industries, Inc. (DE) (NASDAQ:GENC) is the least popular one with only 4 bullish hedge fund positions. KCAP Financial Inc (NASDAQ:KCAP) 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 ADVM might be a better candidate to consider taking a long position in.

Disclosure: None

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