Is Zoe’s Kitchen Inc (ZOES) A Good Stock To Buy?

Because Zoe’s Kitchen Inc (NYSE:ZOES) has faced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there exists a select few hedge funds that elected to cut their entire stakes heading into Q4. It’s worth mentioning that Columbus Circle Investors dropped the biggest investment of all the hedgies monitored by Insider Monkey, valued at close to $13.7 million in stock. Joseph A. Jolson’s fund, Harvest Capital Strategies, also dropped its stock, about $4 million worth.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Zoe’s Kitchen Inc (NYSE:ZOES) but similarly valued. We will take a look at World Acceptance Corp. (NASDAQ:WRLD), China Distance Education Hldgs Ltd (ADR) (NYSE:DL), Spark Energy Inc (NASDAQ:SPKE), and Donegal Group Inc (NASDAQ:DGICA). All of these stocks’ market caps are similar to ZOES’s market cap.

As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $24 million in ZOES’s case. World Acceptance Corp. (NASDAQ:WRLD) is the most popular stock in this table. On the other hand Donegal Group Inc (NASDAQ:DGICA) is the least popular one with only 3 bullish hedge fund positions. Zoe’s Kitchen Inc (NYSE:ZOES) 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 WRLD might be a better candidate to consider taking a long position in.

Disclosure: None