LMI Aerospace, Inc. (LMIA): Are Hedge Funds Right About This Stock?

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s now take a look at hedge fund activity in other stocks similar to LMI Aerospace, Inc. (NASDAQ:LMIA). We will take a look at Hutchison China MediTech Ltd – ADR (NASDAQ:HCM), GSI Technology, Inc. (NASDAQ:GSIT), CorMedix Inc. (NYSEAMEX:CRMD), and Comstock Resources Inc (NYSE:CRK). This group of stocks’ market caps resemble LMIA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HCM 5 17770 0
GSIT 5 10690 -2
CRMD 3 3997 -1
CRK 8 37062 6

As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $35 million in LMIA’s case. Comstock Resources Inc (NYSE:CRK) is the most popular stock in this table. On the other hand CorMedix Inc. (NYSEAMEX:CRMD) is the least popular one with only 3 bullish hedge fund positions. LMI Aerospace, Inc. (NASDAQ:LMIA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CRK might be a better candidate to consider taking a long position in.

Disclosure: none.