Is Super Micro Computer, Inc. (SMCI) a Good Stock to Buy?

As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Alyeska Investment Group assembled the biggest position in Super Micro Computer, Inc. (NASDAQ:SMCI). Millennium Management, one of the top hedge funds in the world, also made a $3.7 million investment in the stock during the quarter. The following funds were also among the new SMCI investors: Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital, Ken Griffin’s Citadel Investment Group, and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners.

Let’s also examine hedge fund activity in other stocks similar to Super Micro Computer, Inc. (NASDAQ:SMCI). These stocks are Oxford Industries, Inc. (NYSE:OXM), Beneficial Mutual Bancorp Inc (NASDAQ:BNCL), Penn National Gaming, Inc (NASDAQ:PENN), and Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI). This group of stocks’ market caps match SMCI’s market cap.

As you can see these stocks had an average of 17 funds with bullish positions and the average amount invested in these stocks was $164 million, versus $50 million in SMCI’s case. Penn National Gaming, Inc (NASDAQ:PENN) is the most popular stock in this table, while Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI) is the least popular one with only 12 bullish hedge fund positions. Super Micro Computer, Inc. (NASDAQ:SMCI) 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 Penn National Gaming, Inc (NASDAQ:PENN) might be a better candidate to consider taking a long position in.

Disclosure: none