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Should You Avoid Abengoa Yield PLC (ABY)?

Due to the fact that Abengoa Yield PLC (NASDAQ:ABY) has faced a declination in interest from the entirety of the hedge funds we track, we can see that there were a few fund managers who sold off their full holdings heading into Q4. Interestingly, Nick Niell’s Arrowgrass Capital Partners sold off the biggest position of the 700 funds tracked by Insider Monkey, comprising about $37.8 million in stock, and Daniel S. Och’s OZ Management was right behind this move, as the fund cut about $6 million worth. These moves are interesting, as total hedge fund interest was cut by 3 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Abengoa Yield PLC (NASDAQ:ABY) but similarly valued. These stocks are International Bancshares Corp (NASDAQ:IBOC), ZS Pharma Inc (NASDAQ:ZSPH), National Penn Bancshares (NASDAQ:NPBC), and Retail Opportunity Investments Corp (NASDAQ:ROIC). This group of stocks’ market valuations are similar to ABY’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IBOC 12 31919 0
ZSPH 20 458423 -2
NPBC 17 182523 1
ROIC 12 96612 2

As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $192 million. That figure was $383 million in ABY’s case. ZS Pharma Inc (NASDAQ:ZSPH) is the most popular stock in this table. On the other hand International Bancshares Corp (NASDAQ:IBOC) is the least popular one with only 12 bullish hedge fund positions. Abengoa Yield PLC (NASDAQ:ABY) 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 ZSPH might be a better candidate to consider a long position.

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