Should You Avoid JMP Group Inc. (JMP)?

Since JMP Group Inc. (NYSE:JMP) has witnessed a decline in interest from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of money managers who were dropping their positions entirely last quarter. At the top of the heap, Eric Halet and Davide Serra’s Algebris Investments sold off the biggest stake of the “upper crust” of funds watched by Insider Monkey, totaling close to $0.8 million in stock, and Jacob Gottlieb’s Visium Asset Management was right behind this move, as the fund cut about $0.1 million worth.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as JMP Group Inc. (NYSE:JMP) but similarly valued. We will take a look at Energy Fuels Inc Ordinary Shares (Canada) (NYSEMKT:UUUU), Supercom Ltd (NASDAQ:SPCB), Consumer Portfolio Services, Inc. (NASDAQ:CPSS), and Veracyte Inc (NASDAQ:VCYT). This group of stocks’ market valuations resemble JMP’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
UUUU 4 3685 2
SPCB 8 7129 -3
CPSS 13 21502 0
VCYT 10 25609 1

As you can see these stocks had an average of an 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $5 million in JMP’s case. Consumer Portfolio Services, Inc. (NASDAQ:CPSS) is the most popular stock in this table. On the other hand Energy Fuels Inc Ordinary Shares (Canada) (NYSEMKT:UUUU) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks JMP Group Inc. (NYSE:JMP) is even less popular than UUUU. 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.