Should You Buy Alico, Inc. (ALCO)?

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s also examine hedge fund activity in other stocks similar to Alico, Inc. (NASDAQ:ALCO). We will take a look at Nathan’s Famous, Inc. (NASDAQ:NATH), Cascadian Therapeutics Inc (USA) (NASDAQ:CASC), Farmers Capital Bank Corp (NASDAQ:FFKT), and Verso Corporation (NYSE:VRS). This group of stocks’ market caps are similar to ALCO’s market cap.

As you can see these stocks had an average of nine funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $37 million in ALCO’s case. Verso Corporation (NYSE:VRS) is the most popular stock in this table. On the other hand, Farmers Capital Bank Corp (NASDAQ:FFKT) is the least popular one with only three bullish hedge fund positions. Alico, Inc. (NASDAQ:ALCO) 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 VRS might be a better candidate to consider taking a long position in.

Disclosure: None