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Is Shinhan Financial Group Co., Ltd. (ADR) (SHG) A Good Stock To Buy?

Since Shinhan Financial Group Co., Ltd. (ADR) (NYSE:SHG) has faced a declining sentiment from the smart money, it’s easy to see that there lies a certain “tier” of hedge funds that elected to cut their full holdings heading into Q4. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the biggest position of the “upper crust” of funds tracked by Insider Monkey, totaling an estimated $6.9 million in stock. Jim Simons’ Renaissance Technologies, also sold off its stock, about $2.2 million worth. These transactions are interesting, as total hedge fund interest was cut by 3 funds heading into Q4.

Let’s now review hedge fund activity in other stocks similar to Shinhan Financial Group Co., Ltd. (ADR) (NYSE:SHG). We will take a look at Wisconsin Energy Corporation (NYSE:WEC), Nielsen Hldg NV (NYSE:NLSN), M&T Bank Corporation (NYSE:MTB), and Micron Technology, Inc. (NASDAQ:MU). This group of stocks’ market valuations resemble SHG’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WEC 14 57070 -12
NLSN 19 463231 -9
MTB 20 833839 0
MU 71 1874311 -8

As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $807 million. That figure was just $7 million in SHG’s case. Micron Technology, Inc. (NASDAQ:MU) is the most popular stock in this table, while Wisconsin Energy Corporation (NYSE:WEC) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks, Shinhan Financial Group Co., Ltd. (ADR) (NYSE:SHG) is even less popular than WEC. 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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