Should You Avoid Aviat Networks Inc (AVNW)?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: 999. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically, a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case here because none of the 700+ hedge funds tracked by Insider Monkey identified Aviat Networks Inc (NASDAQ:AVNW) as a viable investment and initiated a position in the stock.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Aviat Networks Inc (NASDAQ:AVNW) but similarly valued. These stocks are Carolina Bank Holding Inc. (NC) (NASDAQ:CLBH), Vericel Corp (NASDAQ:VCEL), Town Sports International Holdings, Inc. (NASDAQ:CLUB), and Ion Geophysical Corp (NYSE:IO). All of these stocks’ market caps match Aviat Networks Inc (NASDAQ:AVNW)’s market cap.

As you can see, these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $15 million in Aviat Networks Inc (NASDAQ:AVNW)’s case. Ion Geophysical Corp (NYSE:IO) is the most popular stock in this table. On the other hand, Carolina Bank Holding Inc. (NC) (NASDAQ:CLBH) is the least popular one with only 4 bullish hedge fund positions. Aviat Networks Inc (NASDAQ:AVNW) 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, Ion Geophysical Corp (NYSE:IO) might be a better candidate to consider a long position.