Mercury General Corporation (MCY): Are Hedge Funds Right About This Stock?

Because Mercury General Corporation (NYSE:MCY) has faced a bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of fund managers that slashed their full holdings in the third quarter. Interestingly, Jacob Gottlieb’s Visium Asset Management dropped the largest position of all the hedgies followed by Insider Monkey, valued at an estimated $1.1 million in CALL options. Matthew Hulsizer’s fund, PEAK6 Capital Management, also sold off its CALL options, about $0.6 million worth of options. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks similar to Mercury General Corporation (NYSE:MCY). These stocks are Deluxe Corporation (NYSE:DLX), Emcor Group Inc (NYSE:EME), Rayonier Inc. (NYSE:RYN), and BBVA Banco Frances S.A. (ADR) (NYSE:BFR). All of these stocks’ market caps match Mercury General Corporation (NYSE:MCY)’s market cap.

As you can see, these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $206 million. That figure was $18 million in Mercury General Corporation (NYSE:MCY)’s case. Deluxe Corporation (NYSE:DLX) is the most popular stock in this table. On the other hand, BBVA Banco Frances S.A. (ADR) (NYSE:BFR) is the least popular one with only 6 bullish hedge fund positions. Mercury General Corporation (NYSE:MCY) 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 Deluxe Corporation (NYSE:DLX) might be a better candidate to consider a long position.