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Is Northrim BanCorp, Inc. (NRIM) A Good Stock to Buy?

We view hedge fund activity in the stock as unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 700+ hedge funds tracked by Insider Monkey identified NRIM as a viable investment and initiated a position in the stock.

Let’s check out hedge fund activity in other stocks similar to Northrim BanCorp, Inc. (NASDAQ:NRIM). These stocks are Owens Realty Mortgage Inc (NYSEMKT:ORM), Rightside Group Ltd (NASDAQ:NAME), AcelRx Pharmaceuticals Inc (NASDAQ:ACRX), and Westport Innovations Inc. (USA) (NASDAQ:WPRT). All of these stocks’ market caps are closest to NRIM’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ORM 4 16238 0
NAME 10 23261 4
ACRX 6 28945 -3
WPRT 6 8301 -1

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 $19 million. That figure was $23 million in NRIM’s case. Rightside Group Ltd (NASDAQ:NAME) is the most popular stock in this table. On the other hand Owens Realty Mortgage Inc (NYSEMKT:ORM) is the least popular one with only 4 bullish hedge fund positions. Northrim BanCorp, Inc. (NASDAQ:NRIM) 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 NAME might be a better candidate to consider taking a long position in.

Disclosure: None