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Is Zynga Inc (ZNGA) A Good Stock To Buy?

Seeing as Zynga Inc (NASDAQ:ZNGA) has witnessed bearish sentiment from the smart money, it’s easy to see that there was a specific group of hedge funds who were dropping their entire stakes in the third quarter. Interestingly, Karthik Sarma’s SRS Investment Management sold off the biggest investment of all the hedgies tracked by Insider Monkey, comprising about $50.6 million in stock, and Millennium Management Subsidiary’s Blue Arrow Capital Management was right behind this move, as the fund said goodbye to about $14.6 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 3 funds in the third quarter.

Let’s also examine hedge fund activity in other stocks similar to Zynga Inc (NASDAQ:ZNGA). These stocks are Hancock Holding Company (NASDAQ:HBHC), B&G Foods, Inc. (NYSE:BGS), Time Inc (NYSE:TIME), and Generac Holdings Inc. (NYSE:GNRC). All of these stocks’ market caps are similar to ZNGA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HBHC 17 143375 2
BGS 16 132683 5
TIME 18 113280 -7
GNRC 14 150391 -1

As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $135 million. That figure was $495 million in ZNGA’s case. Time Inc (NYSE:TIME) is the most popular stock in this table. On the other hand Generac Holdings Inc. (NYSE:GNRC) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Zynga Inc (NASDAQ:ZNGA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

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