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Should You Avoid Medallion Financial Corp (TAXI)?

Because Medallion Financial Corp (NASDAQ:TAXI) has witnessed a bearish sentiment from hedge fund managers, it’s safe to say that there was a specific group of hedgies who sold off their full holdings by the end of the third quarter. Intriguingly, Mark Broach’s Manatuck Hill Partners sold off the biggest stake of all the hedgies monitored by Insider Monkey, worth an estimated $4.2 million in stock. Joseph A. Jolson’s fund, Harvest Capital Strategies, also dumped its stock, about $3.3 million worth of shares. These transactions are important to note, as total hedge fund interest was cut by 6 funds by the end of the third quarter.

Let’s go over hedge fund activity in other stocks similar to Medallion Financial Corp (NASDAQ:TAXI). These stocks are MVC Capital, Inc. (NYSE:MVC), Merchants Bancshares,Inc. (NASDAQ:MBVT), Blueknight Energy Partners L.P. (NASDAQ:BKEP), and Five9 Inc (NASDAQ:FIVN). This group of stocks’ market values are similar to Medallion Financial Corp (NASDAQ:TAXI)’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MVC 8 23554 -2
MBVT 4 6625 0
BKEP 5 36682 1
FIVN 7 9920 -6

As you can see, these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $8 million in Medallion Financial Corp (NASDAQ:TAXI)’s case. MVC Capital, Inc. (NYSE:MVC) is the most popular stock in this table. On the other hand, Merchants Bancshares,Inc. (NASDAQ:MBVT) is the least popular one with only 4 bullish hedge fund positions. Medallion Financial Corp (NASDAQ:TAXI) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, MVC Capital, Inc. (NYSE:MVC) might be a better candidate to consider a long position.

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