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

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