Should You Avoid Companhia Brasileira de Distrib. (ADR) (CBD)?

Seeing as Companhia Brasileira de Distrib. (ADR) (NYSE:CBD) has faced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedge funds that slashed their full holdings last quarter. At the top of the heap, Lee Munder’s Lee Munder Capital Group sold off the biggest position of the 700 funds monitored by Insider Monkey, comprising close to $4.1 million in stock, and Louis Bacon’s Moore Global Investments was right behind this move, as the fund said goodbye to about $1.2 million worth of shares. These moves are interesting, as total hedge fund interest fell by 1 fund last quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Companhia Brasileira de Distrib. (ADR) (NYSE:CBD). We will take a look at Radian Group Inc (NYSE:RDN), Corelogic Inc (NYSE:CLGX), ENSCO PLC (NYSE:ESV), and First Horizon National Corporation (NYSE:FHN). This group of stocks’ market values resemble CBD’s market value.

As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $426 million. That figure was $31 million in CBD’s case. Radian Group Inc (NYSE:RDN) is the most popular stock in this table. On the other hand First Horizon National Corporation (NYSE:FHN) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Companhia Brasileira de Distrib. (ADR) (NYSE:CBD) is even less popular than FHN with just 8 funds invested. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.