Is Rightside Group Ltd (NAME) A Good Stock To Buy?

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We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: MFP Investors. 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 NAME as a viable investment and initiated a position in the stock.

Let’s go over hedge fund activity in other stocks similar to Rightside Group Ltd (NASDAQ:NAME). We will take a look at Dipexium Pharmaceuticals Inc (NASDAQ:DPRX), Electro Scientific Industries, Inc. (NASDAQ:ESIO), Daqo New Energy Corp (NYSE:DQ), and Core Molding Technologies, Inc. (NYSEMKT:CMT). All of these stocks’ market caps are closest to NAME’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DPRX 8 34999 0
ESIO 10 29822 -2
DQ 4 17050 -1
CMT 5 14357 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 $24 million, compared to $11 million in NAME’s case. Electro Scientific Industries, Inc. (NASDAQ:ESIO) is the most popular stock in this table. On the other hand Daqo New Energy Corp (NYSE:DQ) is the least popular one with only 4 bullish hedge fund positions. Rightside Group Ltd (NASDAQ:NAME) 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 ESIO might be a better candidate to consider a long position.

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