We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Citadel Investment Group. 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 only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).
Let’s go over hedge fund activity in other stocks similar to Overstock.com, Inc. (NASDAQ:OSTK). We will take a look at Myers Industries, Inc. (NYSE:MYE), Axcelis Technologies Inc (NASDAQ:ACLS), Fly Leasing Ltd(ADR) (NYSE:FLY), and Audentes Therapeutics Inc (NASDAQ:BOLD). This group of stocks’ market values match OSTK’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MYE | 9 | 68835 | 0 |
| ACLS | 10 | 57942 | -2 |
| FLY | 8 | 41338 | -1 |
| BOLD | 13 | 166773 | 13 |
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $84 million. That figure was $84 million in OSTK’s case. Audentes Therapeutics Inc (NASDAQ:BOLD) is the most popular stock in this table. On the other hand Fly Leasing Ltd(ADR) (NYSE:FLY) is the least popular one with only 8 bullish hedge fund positions. Overstock.com, Inc. (NASDAQ:OSTK) 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 BOLD might be a better candidate to consider taking a long position in.
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Disclosure: None
