Is STG Group Inc. (GDEF) A Good Stock To Buy?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Bulldog Investors. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 700+ hedge funds tracked by Insider Monkey identified GDEF as a viable investment and initiated a position in the stock.

Let’s now take a look at hedge fund activity in other stocks similar to STG Group Inc (OTCMKTS:GDEF). These stocks are GSI Technology, Inc. (NASDAQ:GSIT), Aurinia Pharmaceuticals Inc (NASDAQ:AUPH), and Diana Containerships Inc (NASDAQ:DCIX). This group of stocks’ market caps are closest to GDEF’s market cap.

As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. That figure was $22 million in GDEF’s case. STG Group Inc (OTCMKTS:GDEF)registers a hedge fund interest above the average, which we view as a slightly positive signal, which suggests that GDEF may be an interesting stock to take a closer look at.