Is LGI Homes Inc (LGIH) Going to Burn These Hedge Funds?

Consequently, key money managers were leading the bulls’ herd. Capital Growth Management assembled the most outsized position in LGI Homes Inc (NASDAQ:LGIH). Renaissance Technologies also initiated a $3.7 million position during the quarter. The other funds with new positions in the stock are PDT Partners, Richard Driehaus’s Driehaus Capital, and Israel Englander’s Millennium Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as LGI Homes Inc (NASDAQ:LGIH) but similarly valued. These stocks are WMIH Corp (OTCMKTS:WMIH), Navios Maritime Acquisition Corp (NYSE:NNA), Kelly Services, Inc. (NASDAQ:KELYA), and Diana Shipping Inc. (NYSE:DSX). This group of stocks’ market valuations resemble LGIH’s market valuation.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $64 million, the same as in LGIH’s case. WMIH Corp (OTCMKTS:WMIH) is the most popular stock in this table. On the other hand Kelly Services, Inc. (NASDAQ:KELYA) is the least popular one with only 10 bullish hedge fund positions. LGI Homes Inc (NASDAQ:LGIH) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard WMIH might be a better candidate to consider a long position.