Is Stonegate Mortgage Corp (SGM) A Good Stock to Buy?

Because Stonegate Mortgage Corp (NYSE:SGM) has gone through bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there were a few hedgies that slashed their entire stakes heading into Q4. Intriguingly, Israel Englander’s Millennium Management cut the largest investment of the 700 funds studied by Insider Monkey, worth close to $0.2 million in stock, and Andy Redleaf’s Whitebox Advisors was right behind this move, as the fund dumped about $0.1 million worth of shares.

Let’s go over hedge fund activity in other stocks similar to Stonegate Mortgage Corp (NYSE:SGM). These stocks are Safe Bulkers, Inc. (NYSE:SB), Prudential Bancorp, Inc. of PA (NASDAQ:PBIP), Ellington Residential Mortgage REIT (NYSE:EARN), and Xenon Pharmaceuticals Inc (NASDAQ:XENE). This group of stocks’ market valuations are closest to SGM’s market valuation.

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $25 million in SGM’s case. Xenon Pharmaceuticals Inc (NASDAQ:XENE) is the most popular stock in this table. On the other hand Prudential Bancorp, Inc. of PA (NASDAQ:PBIP) is the least popular one with only 4 bullish hedge fund positions. Stonegate Mortgage Corp (NYSE:SGM) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard XENE might be a better candidate to consider taking a long position in.

Disclosure: None