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Is Middlesex Water Company (MSEX) A Good Stock To Buy?

Due to the fact that Middlesex Water Company (NASDAQ:MSEX) has weathered declining sentiment from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedge funds that decided to sell off their entire stakes heading into Q4. Intriguingly, Israel Englander’s Millennium Management cashed in the biggest position of all the hedgies studied by Insider Monkey, worth about $1.4 million in stock. Matthew Hulsizer’s fund, PEAK6 Capital Management, also dumped its call options, about $0.9 million worth.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Middlesex Water Company (NASDAQ:MSEX) but similarly valued. We will take a look at Encore Capital Group, Inc. (NASDAQ:ECPG), AeroVironment, Inc. (NASDAQ:AVAV), Epizyme Inc (NASDAQ:EPZM), and PDF Solutions, Inc. (NASDAQ:PDFS). All of these stocks’ market caps are similar to MSEX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ECPG 6 69117 0
AVAV 5 21627 -1
EPZM 14 64785 2
PDFS 12 89329 -5

As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $61 million. That figure was $31 million in MSEX’s case. Epizyme Inc (NASDAQ:EPZM) is the most popular stock in this table. On the other hand AeroVironment, Inc. (NASDAQ:AVAV) is the least popular one with only 5 bullish hedge fund positions. Middlesex Water Company (NASDAQ:MSEX) 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 EPZM might be a better candidate to consider taking a long position in.