Because Stein Mart, Inc. (NASDAQ:SMRT) has witnessed declining sentiment from the smart money, it’s safe to say that there were a few hedge funds that decided to sell off their entire stakes in the third quarter. Interestingly, Andrew Weiss’ Weiss Asset Management dropped the largest investment of all the hedgies tracked by Insider Monkey, comprising an estimated $1 million in stock, and Roger Ibbotson’s Zebra Capital Management was right behind this move, as the fund sold off about $0.4 million worth. These transactions are interesting, as total hedge fund interest was cut by 3 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Stein Mart, Inc. (NASDAQ:SMRT) but similarly valued. These stocks are Forestar Group Inc. (NYSE:FOR), ReTailMeNot Inc (NASDAQ:SALE), Sunedison Semiconductor Ltd (NASDAQ:SEMI), and Fred’s, Inc. (NASDAQ:FRED). This group of stocks’ market valuations resemble SMRT’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $91 million, compared to $62 million in SMRT’s case. Sunedison Semiconductor Ltd (NASDAQ:SEMI) is the most popular stock in this table. On the other hand Fred’s, Inc. (NASDAQ:FRED) is the least popular one with only 5 bullish hedge fund positions. Stein Mart, Inc. (NASDAQ:SMRT) 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 SEMI might be a better candidate to consider a long position.