Should You Avoid Children’s Place Retail Stores, Inc. (PLCE)?

Seeing as Children’s Place Retail Stores, Inc. (NASDAQ:PLCE) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few money managers that elected to cut their full holdings by the end of the third quarter. It’s worth mentioning that Israel Englander’s Millennium Management cut the largest investment of the 700 funds followed by Insider Monkey, totaling an estimated $11.2 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund said goodbye to about $5.1 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 8 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Children’s Place Retail Stores, Inc. (NASDAQ:PLCE) but similarly valued. We will take a look at Milacron Holdings Corp (NYSE:MCRN), Redwood Trust, Inc. (NYSE:RWT), Ixia (NASDAQ:XXIA), and Universal Forest Products, Inc. (NASDAQ:UFPI). All of these stocks’ market caps match PLCE’s market cap.

As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $87 million. That figure was $185 million in PLCE’s case. Ixia (NASDAQ:XXIA) is the most popular stock in this table. On the other hand Redwood Trust, Inc. (NYSE:RWT) is the least popular one with only 6 bullish hedge fund positions. Children’s Place Retail Stores, Inc. (NASDAQ:PLCE) 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 XXIA might be a better candidate to consider a long position.