Is Sonus Networks, Inc. (SONS) Going to Burn Investors?

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Now, key hedge funds were breaking ground themselves. Radix Partners, led by Joshua Packwood and Schuster Tanger, assembled the most outsized position in Sonus Networks, Inc. (NASDAQ:SONS). Radix Partners had $0.3 million invested in the company at the end of the quarter. Robert B. Gillam’s McKinley Capital Management also initiated a $0.2 million position during the quarter. The only other fund with a new position in the stock is Glenn Russell Dubin’s Highbridge Capital Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Sonus Networks, Inc. (NASDAQ:SONS) but similarly valued. We will take a look at Exactech, Inc. (NASDAQ:EXAC), IES Holdings Inc (NASDAQ:IESC), OMNOVA Solutions Inc. (NYSE:OMN), and Applied Optoelectronics Inc (NASDAQ:AAOI). This group of stocks’ market values match SONS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EXAC 11 35838 1
IESC 6 269129 1
OMN 17 43258 7
AAOI 16 74677 5

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $106 million. That figure was $37 million in SONS’s case. OMNOVA Solutions Inc. (NYSE:OMN) is the most popular stock in this table. On the other hand IES Holdings Inc (NASDAQ:IESC) is the least popular one with only 6 bullish hedge fund positions. Sonus Networks, Inc. (NASDAQ:SONS) 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 OMN might be a better candidate to consider taking a long position in.

Disclosure: None

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