Is Raven Industries, Inc. (RAVN) A Good Stock To Buy?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: 999. 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 here because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was PEAK6 Capital Management).

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Raven Industries, Inc. (NASDAQ:RAVN) but similarly valued. We will take a look at Chegg Inc (NYSE:CHGG), Diamond Hill Investment Group, Inc. (NASDAQ:DHIL), Sportsman’s Warehouse Holdings Inc (NASDAQ:SPWH), and Dime Community Bancshares, Inc. (NASDAQ:DCOM). This group of stocks’ market caps match Raven Industries, Inc. (NASDAQ:RAVN)’s market cap.

As you can see, these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $46 million in Raven Industries, Inc. (NASDAQ:RAVN)’s case. Sportsman’s Warehouse Holdings Inc (NASDAQ:SPWH) is the most popular stock in this table. On the other hand, Diamond Hill Investment Group, Inc. (NASDAQ:DHIL) is the least popular one with only 5 bullish hedge fund positions. Raven Industries, Inc. (NASDAQ:RAVN) 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, Sportsman’s Warehouse Holdings Inc (NASDAQ:SPWH) might be a better candidate to consider a long position.