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Should You Avoid HSN, Inc. (HSNI)?

Judging by the fact that HSN, Inc. (NASDAQ:HSNI) has experienced a declining sentiment from the aggregate hedge fund industry, logic holds that there were a few hedge funds who were dropping their entire stakes by the end of the third quarter. At the top of the heap, Robert Millard’s Realm Partners said goodbye to the biggest position of the “upper crust” of funds tracked by Insider Monkey, totaling about $4.6 million in stock. Andrew Sandler’s fund, Sandler Capital Management, also sold off its stock, about $3.9 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 10 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as HSN, Inc. (NASDAQ:HSNI) but similarly valued. We will take a look at New Residential Investment Corp (NYSE:NRZ), PrivateBancorp Inc (NASDAQ:PVTB), Federated Investors Inc (NYSE:FII), and Integrated Device Technology, Inc. (NASDAQ:IDTI). This group of stocks’ market values are closest to HSNI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NRZ 33 674420 -5
PVTB 15 233875 -2
FII 12 272665 -6
IDTI 36 520148 -7

As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $425 million. That figure was just $59 million in HSNI’s case. Integrated Device Technology, Inc. (NASDAQ:IDTI) is the most popular stock in this table. On the other hand Federated Investors Inc (NYSE:FII) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks HSN, Inc. (NASDAQ:HSNI) is even less popular than FII. 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.

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