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Perion Network Ltd (PERI) May Be Best Avoided

Due to the fact that Perion Network Ltd (NASDAQ:PERI) has experienced falling interest from hedge fund managers, logic holds that there is a sect of hedge funds that slashed their positions entirely in the third quarter. It’s worth mentioning that D E Shaw dumped the largest position of all the hedgies watched by Insider Monkey, valued at close to $0.1 million in stock, and Peter Muller’s PDT Partners was right behind this move, as the fund said goodbye to about $0.1 million worth of shares. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 2 funds in the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Perion Network Ltd (NASDAQ:PERI) but similarly valued. We will take a look at ModusLink Global Solutions, Inc. (NASDAQ:MLNK), Harmony Merger Corp (NASDAQ:HRMN), magicJack VocalTec Ltd (NASDAQ:CALL), and Planet Payment Inc (NASDAQ:PLPM). All of these stocks’ market caps resemble PERI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MLNK 11 61293 0
HRMN 4 17719 1
CALL 9 11341 0
PLPM 10 4986 4

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $3 million in PERI’s case. ModusLink Global Solutions, Inc. (NASDAQ:MLNK) is the most popular stock in this table. On the other hand Harmony Merger Corp (NASDAQ:HRMN) is the least popular one with only 4 bullish hedge fund positions. Perion Network Ltd (NASDAQ:PERI) is not the least popular stock in this group but hedge fund interest is still below average, and there is less money invested in it than in any of the other stocks listed. This is a negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MLNK might be a better candidate to consider a long position in.

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