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Is Rush Enterprises, Inc. (RUSHB) A Good Stock To Buy?

Because Rush Enterprises, Inc. (NASDAQ:RUSHB) has witnessed a declining sentiment from the aggregate hedge fund industry, it’s safe to say that there was a specific group of funds that elected to cut their full holdings last quarter. Intriguingly, Noah Levy and Eugene Dozortsev’s Newtyn Management sold off the largest investment of the 700 funds monitored by Insider Monkey, valued at about $12.8 million in stock. Andrew Goldman’s fund, Seven Locks Capital Management, also dumped its stock, about $1.3 million worth of shares. These transactions are important to note, as total hedge fund interest was cut by 2 funds last quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Rush Enterprises, Inc. (NASDAQ:RUSHB) but similarly valued. These stocks are State Auto Financial Corp (NASDAQ:STFC), Textainer Group Holdings Limited (NYSE:TGH), Inogen Inc (NASDAQ:INGN), and Changyou.Com Ltd (ADR) (NASDAQ:CYOU). All of these stocks’ market caps match Rush Enterprises, Inc. (NASDAQ:RUSHB)’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
STFC 4 25290 -3
TGH 7 6582 -1
INGN 18 90344 2
CYOU 9 13441 -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 $34 million. That figure was $32 million in Rush Enterprises, Inc. (NASDAQ:RUSHB)’s case. Inogen Inc (NASDAQ:INGN) is the most popular stock in this table. On the other hand, State Auto Financial Corp (NASDAQ:STFC) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks, Rush Enterprises, Inc. (NASDAQ:RUSHB) is even less popular than State Auto Financial Corp (NASDAQ:STFC). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.

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