Should You Avoid M.D.C. Holdings, Inc. (MDC)?

We already know that not all hedge funds are bullish on the stock and some hedge funds actually cashed in their positions entirely. It’s worth mentioning that Ken Griffin’s Citadel Investment Group cashed in the largest stake of the “upper crust” of funds followed by Insider Monkey, worth an estimated $0.6 million in call options. Paul Tudor Jones’s fund, Tudor Investment Corp, also dumped its stock, about $0.2 million worth.

Let’s now review hedge fund activity in other stocks similar to M.D.C. Holdings, Inc. (NYSE:MDC). These stocks are Oclaro, Inc. (NASDAQ:OCLR), Cubic Corporation (NYSE:CUB), Franklin Street Properties Corp. (NYSEAMEX:FSP), and WesBanco, Inc. (NASDAQ:WSBC). All of these stocks’ market caps are closest to MDC’s market cap.

As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $111 million. That figure was $62 million in MDC’s case. Oclaro, Inc. (NASDAQ:OCLR) is the most popular stock in this table. On the other hand WesBanco, Inc. (NASDAQ:WSBC) is the least popular one with only 7 bullish hedge fund positions. M.D.C. Holdings, Inc. (NYSE:MDC) 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 OCLR might be a better candidate to consider taking a long position in.