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Should You Avoid Ciena Corporation (CIEN)?

Seeing as Ciena Corporation (NASDAQ:CIEN) has faced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few money managers who were dropping their positions entirely heading into Q4. Interestingly, Ken Hahn’s Quentec Asset Management sold off the biggest investment of the “upper crust” of funds monitored by Insider Monkey, worth close to $8.8 million in stock, and David Costen Haley’s HBK Investments was right behind this move, as the fund cut about $5.1 million worth of shares. These transactions are intriguing to say the least, as total hedge fund interest dropped by 2 funds heading into Q4.

Let’s check out hedge fund activity in other stocks similar to Ciena Corporation (NASDAQ:CIEN). These stocks are Paycom Software Inc (NYSE:PAYC), InterXion Holding NV (NYSE:INXN), Nu Skin Enterprises, Inc. (NYSE:NUS), and Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP). This group of stocks’ market caps resemble CIEN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PAYC 18 134789 -1
INXN 39 923290 4
NUS 23 213447 6
RHP 18 352245 0

As you can see these stocks had an average of 24.5 hedge funds with bullish positions and the average amount invested in these stocks was $406 million. That figure was $275 million in CIEN’s case. InterXion Holding NV (NYSE:INXN) is the most popular stock in this table. On the other hand Paycom Software Inc (NYSE:PAYC) is the least popular one with only 18 bullish hedge fund positions. Ciena Corporation (NASDAQ:CIEN) 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 INXN might be a better candidate to consider a long position in.

Disclosure: None

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