Is Square Inc (SQ) a Good Stock to Buy?

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We already know that not all hedge funds are bullish on the stock and some hedge funds actually dumped their positions entirely. At the top of the heap, Christopher Lyle’s SCGE Management dumped the biggest investment of the “upper crust” of funds monitored by Insider Monkey, comprising an estimated $22.6 million in stock, and Chase Coleman’s Tiger Global Management LLC was right behind this move, as the fund dropped about $10.7 million worth of shares.

Let’s also examine hedge fund activity in other stocks similar to Square Inc (NYSE:SQ). We will take a look at Gold Fields Limited (ADR) (NYSE:GFI), Pool Corporation (NASDAQ:POOL), BWX Technologies Inc (NYSE:BWXT), and Popular Inc (NASDAQ:BPOP). This group of stocks’ market valuations match SQ’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GFI 19 254543 0
POOL 26 205269 3
BWXT 29 786752 6
BPOP 30 586643 3

As you can see these stocks had an average of 26 funds with bullish positions and the average amount invested in these stocks was $458 million. That figure was $172 million in SQ’s case. Popular Inc (NASDAQ:BPOP) is the most popular stock in this table, while Gold Fields Limited (ADR) (NYSE:GFI) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Square Inc (NYSE:SQ) is even less popular than Gold Fields Limited (ADR) (NYSE:GFI). 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.

Disclosure: none

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