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Is Tristate Capital Holdings Inc (TSC) A Good Stock To Buy?

Since Tristate Capital Holdings Inc (NASDAQ:TSC) has witnessed falling interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedge funds that decided to sell off their entire stakes by the end of the third quarter. It’s worth mentioning that Paul Magidson, Jonathan Cohen. And Ostrom Enders’s Castine Capital Management cut the biggest investment of the 700 funds followed by Insider Monkey, valued at about $1.3 million in stock. Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s fund, GRT Capital Partners, also cut its stock, about $0.2 million worth. These transactions are interesting, as total hedge fund interest fell by 1 funds by the end of the third quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Tristate Capital Holdings Inc (NASDAQ:TSC) but similarly valued. These stocks are SciClone Pharmaceuticals, Inc. (NASDAQ:SCLN), PennyMac Financial Services Inc (NYSE:PFSI), Elizabeth Arden, Inc. (NASDAQ:RDEN), and Bridgepoint Education Inc (NYSE:BPI). This group of stocks’ market caps are closest to TSC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SCLN 14 21087 -6
PFSI 16 161562 0
RDEN 8 22180 -1
BPI 11 38940 -4

As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $61 million.That figure was $35 million in TSC’s case. PennyMac Financial Services Inc (NYSE:PFSI) is the most popular stock in this table. On the other hand Elizabeth Arden, Inc. (NASDAQ:RDEN) is the least popular one with only 8 bullish hedge fund positions. Tristate Capital Holdings Inc (NASDAQ:TSC) 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 PFSI might be a better candidate to consider a long position.

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