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Is Primero Mining Corp (PPP) A Good Stock To Buy?

Due to the fact that Primero Mining Corp (NYSE:PPP) has faced a declination in interest from the aggregate hedge fund industry, logic holds that there is a sect of hedgies that slashed their entire stakes in the third quarter. At the top of the heap, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners dumped the biggest investment of the 700 funds monitored by Insider Monkey, totaling close to $0.2 million in call options., and Matthew Hulsizer’s PEAK6 Capital Management was right behind this move, as the fund dropped about $0.1 million worth. These transactions are interesting, as total hedge fund interest dropped by 2 funds in the third quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Primero Mining Corp (NYSE:PPP) but similarly valued. We will take a look at Modine Manufacturing Co. (NYSE:MOD), Credit Suisse AG- VelocityShares Daily Inverse VIX Short Term Etn (NASDAQ:XIV), Karyopharm Therapeutics Inc (NASDAQ:KPTI), and Davids Tea Inc (NASDAQ:DTEA). All of these stocks’ market caps are closest to PPP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MOD 14 39950 1
XIV 11 25345 6
KPTI 11 65394 1
DTEA 4 2238 -3

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 $33 million. That figure was $12 million in PPP’s case. Modine Manufacturing Co. (NYSE:MOD) is the most popular stock in this table. On the other hand, Davids Tea Inc (NASDAQ:DTEA) is the least popular one with only 4 bullish hedge fund positions. Primero Mining Corp (NYSE:PPP) 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 MOD might be a better candidate to consider a long position.

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