Is Virtus Investment Partners Inc (VRTS) A Good Stock To Buy?

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Because Virtus Investment Partners Inc (NASDAQ:VRTS) has witnessed bearish sentiment from the smart money, logic holds that there lies a certain “tier” of money managers who were dropping their full holdings in the third quarter. Interestingly, Murray Stahl’s Horizon Asset Management dumped the largest stake of all the hedgies watched by Insider Monkey, totaling close to $2.6 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund said goodbye to about $0.8 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 2 funds in the third quarter.

Let’s check out hedge fund activity in other stocks similar to Virtus Investment Partners Inc (NASDAQ:VRTS). These stocks are Global Eagle Acquisition Corp (NASDAQ:ENT), BroadSoft Inc (NASDAQ:BSFT), Qiwi PLC (NASDAQ:QIWI), and United Fire Group, Inc. (NASDAQ:UFCS). This group of stocks’ market valuations are similar to VRTS’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ENT 17 443234 -2
BSFT 14 104403 -2
QIWI 8 81567 -2
UFCS 8 19048 1

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 $162 million. That figure was $124 million in VRTS’s case. Global Eagle Acquisition Corp (NASDAQ:ENT) is the most popular stock in this table, while Qiwi PLC (NASDAQ:QIWI) is the least popular one with only 8 bullish hedge fund positions. Virtus Investment Partners Inc (NASDAQ:VRTS) 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 ENT might be a better candidate to consider a long position.

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